Correlation Between PureTech Health and Las Vegas
Can any of the company-specific risk be diversified away by investing in both PureTech Health and Las Vegas 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 Las Vegas 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 Las Vegas Sands, you can compare the effects of market volatilities on PureTech Health and Las Vegas 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 Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureTech Health and Las Vegas.
Diversification Opportunities for PureTech Health and Las Vegas
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between PureTech and Las is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Las Vegas Sands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Vegas Sands 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 Las Vegas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Vegas Sands has no effect on the direction of PureTech Health i.e., PureTech Health and Las Vegas go up and down completely randomly.
Pair Corralation between PureTech Health and Las Vegas
Assuming the 90 days trading horizon PureTech Health plc is expected to under-perform the Las Vegas. In addition to that, PureTech Health is 1.33 times more volatile than Las Vegas Sands. It trades about -0.03 of its total potential returns per unit of risk. Las Vegas Sands is currently generating about 0.02 per unit of volatility. If you would invest 4,636 in Las Vegas Sands on August 30, 2024 and sell it today you would earn a total of 494.00 from holding Las Vegas Sands or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
PureTech Health plc vs. Las Vegas Sands
Performance |
| Timeline |
| PureTech Health plc |
| Las Vegas Sands |
PureTech Health and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureTech Health and Las Vegas
The main advantage of trading using opposite PureTech Health and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health position performs unexpectedly, Las Vegas 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 Las Vegas will offset losses from the drop in Las Vegas' 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 |
| Las Vegas vs. Lendinvest PLC | Las Vegas vs. Neometals | Las Vegas vs. Albion Technology General | Las Vegas vs. Jupiter Fund Management |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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