Correlation Between PURETECH HEALTH and Haleon PLC
Can any of the company-specific risk be diversified away by investing in both PURETECH HEALTH and Haleon PLC 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 PURETECH HEALTH and Haleon PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PURETECH HEALTH PLC and Haleon PLC, you can compare the effects of market volatilities on PURETECH HEALTH and Haleon PLC 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 PURETECH HEALTH with a short position of Haleon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PURETECH HEALTH and Haleon PLC.
Diversification Opportunities for PURETECH HEALTH and Haleon PLC
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between PURETECH and Haleon is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding PURETECH HEALTH PLC and Haleon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon PLC and PURETECH 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 PURETECH HEALTH PLC are associated (or correlated) with Haleon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon PLC has no effect on the direction of PURETECH HEALTH i.e., PURETECH HEALTH and Haleon PLC go up and down completely randomly.
Pair Corralation between PURETECH HEALTH and Haleon PLC
Assuming the 90 days horizon PURETECH HEALTH PLC is expected to under-perform the Haleon PLC. In addition to that, PURETECH HEALTH is 2.03 times more volatile than Haleon PLC. It trades about -0.25 of its total potential returns per unit of risk. Haleon PLC is currently generating about -0.21 per unit of volatility. If you would invest 910.00 in Haleon PLC on October 24, 2024 and sell it today you would lose (45.00) from holding Haleon PLC or give up 4.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PURETECH HEALTH PLC vs. Haleon PLC
Performance |
| Timeline |
| PURETECH HEALTH PLC |
| Haleon PLC |
PURETECH HEALTH and Haleon PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PURETECH HEALTH and Haleon PLC
The main advantage of trading using opposite PURETECH HEALTH and Haleon PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PURETECH HEALTH position performs unexpectedly, Haleon PLC 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 Haleon PLC will offset losses from the drop in Haleon PLC's long position.| PURETECH HEALTH vs. LG Display Co | PURETECH HEALTH vs. ARISTOCRAT LEISURE | PURETECH HEALTH vs. PLAYSTUDIOS A DL 0001 | PURETECH HEALTH vs. Highlight Communications AG |
| Haleon PLC vs. ALERION CLEANPOWER | Haleon PLC vs. Taylor Morrison Home | Haleon PLC vs. The Home Depot | Haleon PLC vs. OFFICE DEPOT |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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