Correlation Between PureTech Health and Impax Asset
Can any of the company-specific risk be diversified away by investing in both PureTech Health and Impax Asset 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 Impax Asset 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 Impax Asset Management, you can compare the effects of market volatilities on PureTech Health and Impax Asset 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 Impax Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureTech Health and Impax Asset.
Diversification Opportunities for PureTech Health and Impax Asset
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PureTech and Impax is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Impax Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Asset Management 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 Impax Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Asset Management has no effect on the direction of PureTech Health i.e., PureTech Health and Impax Asset go up and down completely randomly.
Pair Corralation between PureTech Health and Impax Asset
Assuming the 90 days trading horizon PureTech Health plc is expected to generate 0.78 times more return on investment than Impax Asset. However, PureTech Health plc is 1.29 times less risky than Impax Asset. It trades about -0.1 of its potential returns per unit of risk. Impax Asset Management is currently generating about -0.24 per unit of risk. If you would invest 15,040 in PureTech Health plc on October 30, 2024 and sell it today you would lose (680.00) from holding PureTech Health plc or give up 4.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PureTech Health plc vs. Impax Asset Management
Performance |
| Timeline |
| PureTech Health plc |
| Impax Asset Management |
PureTech Health and Impax Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureTech Health and Impax Asset
The main advantage of trading using opposite PureTech Health and Impax Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health position performs unexpectedly, Impax Asset 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 Impax Asset will offset losses from the drop in Impax Asset's long position.| PureTech Health vs. Zoom Video Communications | PureTech Health vs. Zegona Communications Plc | PureTech Health vs. Aeorema Communications Plc | PureTech Health vs. Charter Communications Cl |
| Impax Asset vs. Bankers Investment Trust | Impax Asset vs. JB Hunt Transport | Impax Asset vs. Chrysalis Investments | Impax Asset vs. Creo Medical 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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