Correlation Between Pure Storage and Whiting Petroleum
Can any of the company-specific risk be diversified away by investing in both Pure Storage and Whiting Petroleum 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 Whiting Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pure Storage and Whiting Petroleum, you can compare the effects of market volatilities on Pure Storage and Whiting Petroleum 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 Whiting Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Storage and Whiting Petroleum.
Diversification Opportunities for Pure Storage and Whiting Petroleum
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pure and Whiting is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage and Whiting Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whiting Petroleum 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 Whiting Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whiting Petroleum has no effect on the direction of Pure Storage i.e., Pure Storage and Whiting Petroleum go up and down completely randomly.
Pair Corralation between Pure Storage and Whiting Petroleum
Given the investment horizon of 90 days Pure Storage is expected to generate 0.37 times more return on investment than Whiting Petroleum. However, Pure Storage is 2.74 times less risky than Whiting Petroleum. It trades about 0.14 of its potential returns per unit of risk. Whiting Petroleum is currently generating about -0.06 per unit of risk. If you would invest 5,291 in Pure Storage on October 9, 2024 and sell it today you would earn a total of 1,164 from holding Pure Storage or generate 22.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 97.5% |
Values | Daily Returns |
Pure Storage vs. Whiting Petroleum
Performance |
Timeline |
Pure Storage |
Whiting Petroleum |
Pure Storage and Whiting Petroleum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pure Storage and Whiting Petroleum
The main advantage of trading using opposite Pure Storage and Whiting Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Storage position performs unexpectedly, Whiting Petroleum 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 Whiting Petroleum will offset losses from the drop in Whiting Petroleum's long position.Pure Storage vs. Seagate Technology PLC | Pure Storage vs. HP Inc | Pure Storage vs. Dell Technologies | Pure Storage vs. Western Digital |
Whiting Petroleum vs. Chord Energy Corp | Whiting Petroleum vs. Bristow Group | Whiting Petroleum vs. Pioneer Bancorp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |