Correlation Between PureTech Health and Deutsche Post
Can any of the company-specific risk be diversified away by investing in both PureTech Health and Deutsche Post 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 Deutsche Post 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 Deutsche Post AG, you can compare the effects of market volatilities on PureTech Health and Deutsche Post 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 Deutsche Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureTech Health and Deutsche Post.
Diversification Opportunities for PureTech Health and Deutsche Post
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PureTech and Deutsche is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Deutsche Post AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Post AG 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 Deutsche Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Post AG has no effect on the direction of PureTech Health i.e., PureTech Health and Deutsche Post go up and down completely randomly.
Pair Corralation between PureTech Health and Deutsche Post
Assuming the 90 days trading horizon PureTech Health plc is expected to generate 1.48 times more return on investment than Deutsche Post. However, PureTech Health is 1.48 times more volatile than Deutsche Post AG. It trades about 0.16 of its potential returns per unit of risk. Deutsche Post AG is currently generating about -0.22 per unit of risk. If you would invest 14,680 in PureTech Health plc on August 30, 2024 and sell it today you would earn a total of 2,260 from holding PureTech Health plc or generate 15.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PureTech Health plc vs. Deutsche Post AG
Performance |
| Timeline |
| PureTech Health plc |
| Deutsche Post AG |
PureTech Health and Deutsche Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureTech Health and Deutsche Post
The main advantage of trading using opposite PureTech Health and Deutsche Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health position performs unexpectedly, Deutsche Post 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 Deutsche Post will offset losses from the drop in Deutsche Post's long position.| PureTech Health vs. Samsung Electronics Co | PureTech Health vs. Samsung Electronics Co | PureTech Health vs. Hyundai Motor | PureTech Health vs. Toyota Motor Corp |
| Deutsche Post vs. L3Harris Technologies | Deutsche Post vs. PureTech Health plc | Deutsche Post vs. AIM ImmunoTech | Deutsche Post vs. Check Point Software |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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