Correlation Between PureTech Health and Oceaneering International
Can any of the company-specific risk be diversified away by investing in both PureTech Health and Oceaneering International 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 Oceaneering International 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 Oceaneering International, you can compare the effects of market volatilities on PureTech Health and Oceaneering International 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 Oceaneering International. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureTech Health and Oceaneering International.
Diversification Opportunities for PureTech Health and Oceaneering International
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PureTech and Oceaneering is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Oceaneering International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceaneering International 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 Oceaneering International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceaneering International has no effect on the direction of PureTech Health i.e., PureTech Health and Oceaneering International go up and down completely randomly.
Pair Corralation between PureTech Health and Oceaneering International
Assuming the 90 days trading horizon PureTech Health plc is expected to generate 0.99 times more return on investment than Oceaneering International. However, PureTech Health plc is 1.01 times less risky than Oceaneering International. It trades about -0.01 of its potential returns per unit of risk. Oceaneering International is currently generating about -0.23 per unit of risk. If you would invest 15,120 in PureTech Health plc on November 4, 2024 and sell it today you would lose (140.00) from holding PureTech Health plc or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
PureTech Health plc vs. Oceaneering International
Performance |
| Timeline |
| PureTech Health plc |
| Oceaneering International |
PureTech Health and Oceaneering International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureTech Health and Oceaneering International
The main advantage of trading using opposite PureTech Health and Oceaneering International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health position performs unexpectedly, Oceaneering International 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 Oceaneering International will offset losses from the drop in Oceaneering International's long position.| PureTech Health vs. Scandic Hotels Group | PureTech Health vs. Zoom Video Communications | PureTech Health vs. mobilezone holding AG | PureTech Health vs. Batm Advanced Communications |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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