Correlation Between PureTech Health and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both PureTech Health and Thyssenkrupp 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 Thyssenkrupp 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 Thyssenkrupp AG ON, you can compare the effects of market volatilities on PureTech Health and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureTech Health and Thyssenkrupp.
Diversification Opportunities for PureTech Health and Thyssenkrupp
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PureTech and Thyssenkrupp is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Thyssenkrupp AG ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thyssenkrupp AG ON 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thyssenkrupp AG ON has no effect on the direction of PureTech Health i.e., PureTech Health and Thyssenkrupp go up and down completely randomly.
Pair Corralation between PureTech Health and Thyssenkrupp
Assuming the 90 days trading horizon PureTech Health plc is expected to under-perform the Thyssenkrupp. But the stock apears to be less risky and, when comparing its historical volatility, PureTech Health plc is 1.18 times less risky than Thyssenkrupp. The stock trades about -0.04 of its potential returns per unit of risk. The Thyssenkrupp AG ON is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 333.00 in Thyssenkrupp AG ON on September 13, 2024 and sell it today you would earn a total of 86.00 from holding Thyssenkrupp AG ON or generate 25.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PureTech Health plc vs. Thyssenkrupp AG ON
Performance |
| Timeline |
| PureTech Health plc |
| Thyssenkrupp AG ON |
PureTech Health and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureTech Health and Thyssenkrupp
The main advantage of trading using opposite PureTech Health and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| PureTech Health vs. Hyundai Motor | PureTech Health vs. Toyota Motor Corp | PureTech Health vs. SoftBank Group Corp | PureTech Health vs. Halyk Bank of |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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