Correlation Between BH Macro and PureTech Health
Can any of the company-specific risk be diversified away by investing in both BH Macro 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 BH Macro and PureTech Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BH Macro Limited and PureTech Health plc, you can compare the effects of market volatilities on BH Macro 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 BH Macro with a short position of PureTech Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of BH Macro and PureTech Health.
Diversification Opportunities for BH Macro and PureTech Health
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BHMU and PureTech is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BH Macro Limited 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 BH Macro 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 BH Macro Limited 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 BH Macro i.e., BH Macro and PureTech Health go up and down completely randomly.
Pair Corralation between BH Macro and PureTech Health
Assuming the 90 days trading horizon BH Macro Limited is expected to generate 0.55 times more return on investment than PureTech Health. However, BH Macro Limited is 1.83 times less risky than PureTech Health. It trades about -0.01 of its potential returns per unit of risk. PureTech Health plc is currently generating about -0.03 per unit of risk. If you would invest 462.00 in BH Macro Limited on September 1, 2024 and sell it today you would lose (46.00) from holding BH Macro Limited or give up 9.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
BH Macro Limited vs. PureTech Health plc
Performance |
| Timeline |
| BH Macro Limited |
| PureTech Health plc |
BH Macro and PureTech Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BH Macro and PureTech Health
The main advantage of trading using opposite BH Macro and PureTech Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BH Macro 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.| BH Macro vs. PureTech Health plc | BH Macro vs. Blackstone Loan Financing | BH Macro vs. Sunny Optical Technology | BH Macro vs. Made Tech Group |
| PureTech Health vs. Home Depot | PureTech Health vs. Weiss Korea Opportunity | PureTech Health vs. River and Mercantile | PureTech Health vs. Sherborne Investors Guernsey |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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