Correlation Between PureTech Health and Southern Copper
Can any of the company-specific risk be diversified away by investing in both PureTech Health and Southern Copper 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 Southern Copper 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 Southern Copper Corp, you can compare the effects of market volatilities on PureTech Health and Southern Copper 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 Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureTech Health and Southern Copper.
Diversification Opportunities for PureTech Health and Southern Copper
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PureTech and Southern is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Southern Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper Corp 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper Corp has no effect on the direction of PureTech Health i.e., PureTech Health and Southern Copper go up and down completely randomly.
Pair Corralation between PureTech Health and Southern Copper
Assuming the 90 days trading horizon PureTech Health plc is expected to under-perform the Southern Copper. But the stock apears to be less risky and, when comparing its historical volatility, PureTech Health plc is 1.54 times less risky than Southern Copper. The stock trades about -0.19 of its potential returns per unit of risk. The Southern Copper Corp is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 9,560 in Southern Copper Corp on December 9, 2024 and sell it today you would lose (484.00) from holding Southern Copper Corp or give up 5.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PureTech Health plc vs. Southern Copper Corp
Performance |
| Timeline |
| PureTech Health plc |
| Southern Copper Corp |
PureTech Health and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureTech Health and Southern Copper
The main advantage of trading using opposite PureTech Health and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| PureTech Health vs. Blackrock World Mining | PureTech Health vs. Resolute Mining Limited | PureTech Health vs. McEwen Mining | PureTech Health vs. Pan American Silver |
| Southern Copper vs. iShares Physical Silver | Southern Copper vs. BioPharma Credit PLC | Southern Copper vs. Cembra Money Bank | Southern Copper vs. UNIQA Insurance Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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