Correlation Between Pure Storage and Cirrus Logic

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

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

Diversification Opportunities for Pure Storage and Cirrus Logic

0.68

Correlation Coefficient

Pure Storage  Cirrus Logic

Poor diversification

The 3 months correlation between Pure and Cirrus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage and Cirrus Logic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirrus Logic 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 Cirrus Logic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirrus Logic has no effect on the direction of Pure Storage i.e., Pure Storage and Cirrus Logic go up and down completely randomly.

Pair Corralation between Pure Storage and Cirrus Logic

Given the investment horizon of 90 days Pure Storage is expected to generate 1.39 times more return on investment than Cirrus Logic. However, Pure Storage is 1.39 times more volatile than Cirrus Logic. It trades about 0.1 of its potential returns per unit of risk. Cirrus Logic is currently generating about 0.04 per unit of risk. If you would invest  4,758  in Pure Storage on May 4, 2025 and sell it today you would earn a total of  693.00  from holding Pure Storage or generate 14.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Pure Storage  vs.  Cirrus Logic

Pure Storage

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pure Storage are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Pure Storage reported solid returns over the last few months and may actually be approaching a breakup point.

Cirrus Logic

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cirrus Logic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Cirrus Logic is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Pure Storage and Cirrus Logic

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

The idea behind Pure Storage and Cirrus Logic 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..