Correlation Between Naturhouse Health and PureTech Health
Can any of the company-specific risk be diversified away by investing in both Naturhouse 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 Naturhouse 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 Naturhouse Health SA and PureTech Health plc, you can compare the effects of market volatilities on Naturhouse 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 Naturhouse Health with a short position of PureTech Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naturhouse Health and PureTech Health.
Diversification Opportunities for Naturhouse Health and PureTech Health
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Naturhouse and PureTech is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Naturhouse Health SA 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 Naturhouse 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 Naturhouse Health SA 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 Naturhouse Health i.e., Naturhouse Health and PureTech Health go up and down completely randomly.
Pair Corralation between Naturhouse Health and PureTech Health
Assuming the 90 days trading horizon Naturhouse Health SA is expected to generate 0.71 times more return on investment than PureTech Health. However, Naturhouse Health SA is 1.4 times less risky than PureTech Health. It trades about 0.17 of its potential returns per unit of risk. PureTech Health plc is currently generating about -0.27 per unit of risk. If you would invest 167.00 in Naturhouse Health SA on October 22, 2024 and sell it today you would earn a total of 7.00 from holding Naturhouse Health SA or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naturhouse Health SA vs. PureTech Health plc
Performance |
| Timeline |
| Naturhouse Health |
| PureTech Health plc |
Naturhouse Health and PureTech Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naturhouse Health and PureTech Health
The main advantage of trading using opposite Naturhouse Health and PureTech Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naturhouse 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.| Naturhouse Health vs. Gear4music Plc | Naturhouse Health vs. Games Workshop Group | Naturhouse Health vs. Ecofin Global Utilities | Naturhouse Health vs. EJF Investments |
| PureTech Health vs. Inspiration Healthcare Group | PureTech Health vs. Naturhouse Health SA | PureTech Health vs. Spire Healthcare Group | PureTech Health vs. Ecclesiastical Insurance Office |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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