Correlation Between PureTech Health and Baring Emerging
Can any of the company-specific risk be diversified away by investing in both PureTech Health and Baring Emerging 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 Baring Emerging 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 Baring Emerging Europe, you can compare the effects of market volatilities on PureTech Health and Baring Emerging 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 Baring Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureTech Health and Baring Emerging.
Diversification Opportunities for PureTech Health and Baring Emerging
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PureTech and Baring is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Baring Emerging Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baring Emerging Europe 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 Baring Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baring Emerging Europe has no effect on the direction of PureTech Health i.e., PureTech Health and Baring Emerging go up and down completely randomly.
Pair Corralation between PureTech Health and Baring Emerging
Assuming the 90 days trading horizon PureTech Health plc is expected to generate 3.09 times more return on investment than Baring Emerging. However, PureTech Health is 3.09 times more volatile than Baring Emerging Europe. It trades about 0.21 of its potential returns per unit of risk. Baring Emerging Europe is currently generating about 0.46 per unit of risk. If you would invest 15,240 in PureTech Health plc on August 28, 2024 and sell it today you would earn a total of 1,800 from holding PureTech Health plc or generate 11.81% 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. Baring Emerging Europe
Performance |
| Timeline |
| PureTech Health plc |
| Baring Emerging Europe |
PureTech Health and Baring Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureTech Health and Baring Emerging
The main advantage of trading using opposite PureTech Health and Baring Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health position performs unexpectedly, Baring Emerging 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 Baring Emerging will offset losses from the drop in Baring Emerging's long position.| PureTech Health vs. FC Investment Trust | PureTech Health vs. Applied Materials | PureTech Health vs. Herald Investment Trust | PureTech Health vs. TR Property Investment |
| Baring Emerging vs. Catalyst Media Group | Baring Emerging vs. Oncimmune Holdings plc | Baring Emerging vs. Invesco Health Care | Baring Emerging vs. Coor Service 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |