Correlation Between Pure Storage and INTNED

Can any of the company-specific risk be diversified away by investing in both Pure Storage and INTNED at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pure Storage and INTNED into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pure Storage and INTNED 575, you can compare the effects of market volatilities on Pure Storage and INTNED and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pure Storage with a short position of INTNED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Storage and INTNED.

Diversification Opportunities for Pure Storage and INTNED

-0.3

Correlation Coefficient

Pure Storage  INTNED

Very good diversification

The 3 months correlation between Pure and INTNED is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage and INTNED 575 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTNED 575 and Pure Storage is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pure Storage are associated (or correlated) with INTNED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTNED 575 has no effect on the direction of Pure Storage i.e., Pure Storage and INTNED go up and down completely randomly.

Pair Corralation between Pure Storage and INTNED

Given the investment horizon of 90 days Pure Storage is expected to under-perform the INTNED. In addition to that, Pure Storage is 5.5 times more volatile than INTNED 575. It trades about -0.09 of its total potential returns per unit of risk. INTNED 575 is currently generating about 0.05 per unit of volatility. If you would invest  9,876  in INTNED 575 on December 21, 2024 and sell it today you would earn a total of  74.00  from holding INTNED 575 or generate 0.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	46.67%
Values	Daily Returns

Pure Storage  vs.  INTNED 575

Pure Storage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pure Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

INTNED 575

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in INTNED 575 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pure Storage and INTNED

The main advantage of trading using opposite Pure Storage and INTNED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Storage position performs unexpectedly, INTNED can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in INTNED will offset losses from the drop in INTNED's long position.

The idea behind Pure Storage and INTNED 575 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.