Correlation Between Universal Health and PureTech Health
Can any of the company-specific risk be diversified away by investing in both Universal Health 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 Universal Health and PureTech Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Services and PureTech Health plc, you can compare the effects of market volatilities on Universal Health 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 Universal Health with a short position of PureTech Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and PureTech Health.
Diversification Opportunities for Universal Health and PureTech Health
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Universal and PureTech is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Services 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 Universal Health 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 Universal Health Services 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 Universal Health i.e., Universal Health and PureTech Health go up and down completely randomly.
Pair Corralation between Universal Health and PureTech Health
Assuming the 90 days trading horizon Universal Health Services is expected to under-perform the PureTech Health. But the stock apears to be less risky and, when comparing its historical volatility, Universal Health Services is 1.79 times less risky than PureTech Health. The stock trades about -0.34 of its potential returns per unit of risk. The PureTech Health plc is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 17,040 in PureTech Health plc on September 24, 2024 and sell it today you would lose (1,580) from holding PureTech Health plc or give up 9.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Universal Health Services vs. PureTech Health plc
Performance |
| Timeline |
| Universal Health Services |
| PureTech Health plc |
Universal Health and PureTech Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and PureTech Health
The main advantage of trading using opposite Universal Health and PureTech Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health 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.| Universal Health vs. Uniper SE | Universal Health vs. Mulberry Group PLC | Universal Health vs. London Security Plc | Universal Health vs. Triad Group PLC |
| PureTech Health vs. Toyota Motor Corp | PureTech Health vs. SoftBank Group Corp | PureTech Health vs. OTP Bank Nyrt | PureTech Health vs. Public Service Enterprise |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |