Correlation Between Teradata Corp and Pure Storage

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

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

Diversification Opportunities for Teradata Corp and Pure Storage

-0.13

Correlation Coefficient

Teradata Corp  Pure Storage

Good diversification

The 3 months correlation between Teradata and Pure is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Teradata Corp and Pure Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Storage and Teradata Corp 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 Teradata Corp are associated (or correlated) with Pure Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Storage has no effect on the direction of Teradata Corp i.e., Teradata Corp and Pure Storage go up and down completely randomly.

Pair Corralation between Teradata Corp and Pure Storage

Considering the 90-day investment horizon Teradata Corp is expected to generate 1.69 times more return on investment than Pure Storage. However, Teradata Corp is 1.69 times more volatile than Pure Storage. It trades about 0.14 of its potential returns per unit of risk. Pure Storage is currently generating about 0.12 per unit of risk. If you would invest  2,053  in Teradata Corp on September 4, 2025 and sell it today you would earn a total of  889.00  from holding Teradata Corp or generate 43.3% return on investment over 90 days.

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

Teradata Corp  vs.  Pure Storage

Teradata Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Teradata Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, Teradata Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pure Storage

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Pure Storage are ranked lower than 9 (%) 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.

Pair Trading with Teradata Corp and Pure Storage

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

The idea behind Teradata Corp and Pure Storage 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.