Correlation Between Purple Innovation and Traeger

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

By analyzing existing cross correlation between Purple Innovation and Traeger, you can compare the effects of market volatilities on Purple Innovation and Traeger 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 Purple Innovation with a short position of Traeger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Purple Innovation and Traeger.

Diversification Opportunities for Purple Innovation and Traeger

-0.22

Correlation Coefficient

Purple Innovation  Traeger

Very good diversification

The 3 months correlation between Purple and Traeger is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Purple Innovation and Traeger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traeger and Purple Innovation 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 Purple Innovation are associated (or correlated) with Traeger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traeger has no effect on the direction of Purple Innovation i.e., Purple Innovation and Traeger go up and down completely randomly.

Pair Corralation between Purple Innovation and Traeger

Given the investment horizon of 90 days Purple Innovation is expected to generate 1.22 times less return on investment than Traeger. But when comparing it to its historical volatility, Purple Innovation is 1.02 times less risky than Traeger. It trades about 0.05 of its potential returns per unit of risk. Traeger is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  135.00  in Traeger on May 6, 2025 and sell it today you would earn a total of  19.00  from holding Traeger or generate 14.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Purple Innovation  vs.  Traeger

Purple Innovation

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Purple Innovation are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Purple Innovation disclosed solid returns over the last few months and may actually be approaching a breakup point.

Traeger

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Traeger are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Traeger disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Purple Innovation and Traeger

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

The idea behind Purple Innovation and Traeger 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.