Correlation Between Pure Storage and Logitech International

Can any of the company-specific risk be diversified away by investing in both Pure Storage and Logitech International 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 Logitech International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pure Storage and Logitech International SA, you can compare the effects of market volatilities on Pure Storage and Logitech International 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 Logitech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Storage and Logitech International.

Diversification Opportunities for Pure Storage and Logitech International

0.23

Correlation Coefficient

Pure Storage  Logitech International

Modest diversification

The 3 months correlation between Pure and Logitech is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage and Logitech International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logitech International 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 Logitech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logitech International has no effect on the direction of Pure Storage i.e., Pure Storage and Logitech International go up and down completely randomly.

Pair Corralation between Pure Storage and Logitech International

Given the investment horizon of 90 days Pure Storage is expected to generate 1.17 times more return on investment than Logitech International. However, Pure Storage is 1.17 times more volatile than Logitech International SA. It trades about 0.08 of its potential returns per unit of risk. Logitech International SA is currently generating about -0.04 per unit of risk. If you would invest  4,806  in Pure Storage on September 3, 2024 and sell it today you would earn a total of  493.00  from holding Pure Storage or generate 10.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Pure Storage  vs.  Logitech International SA

Pure Storage

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pure Storage are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Pure Storage may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Logitech International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Logitech International SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Logitech International is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Pure Storage and Logitech International

The main advantage of trading using opposite Pure Storage and Logitech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Storage position performs unexpectedly, Logitech International 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 Logitech International will offset losses from the drop in Logitech International's long position.

The idea behind Pure Storage and Logitech International SA 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.