Correlation Between Deutsche Post and PureTech Health
Can any of the company-specific risk be diversified away by investing in both Deutsche Post and PureTech Health 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 Deutsche Post and PureTech Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Post AG and PureTech Health plc, you can compare the effects of market volatilities on Deutsche Post and PureTech Health 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 Deutsche Post with a short position of PureTech Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and PureTech Health.
Diversification Opportunities for Deutsche Post and PureTech Health
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Deutsche and PureTech is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and PureTech Health plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PureTech Health plc and Deutsche Post 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 Deutsche Post AG are associated (or correlated) with PureTech Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PureTech Health plc has no effect on the direction of Deutsche Post i.e., Deutsche Post and PureTech Health go up and down completely randomly.
Pair Corralation between Deutsche Post and PureTech Health
Assuming the 90 days trading horizon Deutsche Post AG is expected to generate 0.53 times more return on investment than PureTech Health. However, Deutsche Post AG is 1.89 times less risky than PureTech Health. It trades about -0.02 of its potential returns per unit of risk. PureTech Health plc is currently generating about -0.02 per unit of risk. If you would invest 4,016 in Deutsche Post AG on September 4, 2024 and sell it today you would lose (513.00) from holding Deutsche Post AG or give up 12.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Post AG vs. PureTech Health plc
Performance |
| Timeline |
| Deutsche Post AG |
| PureTech Health plc |
Deutsche Post and PureTech Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Post and PureTech Health
The main advantage of trading using opposite Deutsche Post and PureTech Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post position performs unexpectedly, PureTech Health 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 PureTech Health will offset losses from the drop in PureTech Health's long position.| Deutsche Post vs. Samsung Electronics Co | Deutsche Post vs. Samsung Electronics Co | Deutsche Post vs. Hyundai Motor | Deutsche Post vs. Toyota Motor Corp |
| PureTech Health vs. SupplyMe Capital PLC | PureTech Health vs. SM Energy Co | PureTech Health vs. FuelCell Energy | PureTech Health vs. Grand Vision Media |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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