Correlation Between PureTech Health and Spire Healthcare
Can any of the company-specific risk be diversified away by investing in both PureTech Health and Spire Healthcare 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 Spire Healthcare 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 Spire Healthcare Group, you can compare the effects of market volatilities on PureTech Health and Spire Healthcare 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 Spire Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureTech Health and Spire Healthcare.
Diversification Opportunities for PureTech Health and Spire Healthcare
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PureTech and Spire is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Spire Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Healthcare 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 Spire Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Healthcare has no effect on the direction of PureTech Health i.e., PureTech Health and Spire Healthcare go up and down completely randomly.
Pair Corralation between PureTech Health and Spire Healthcare
Assuming the 90 days trading horizon PureTech Health plc is expected to under-perform the Spire Healthcare. In addition to that, PureTech Health is 2.37 times more volatile than Spire Healthcare Group. It trades about -0.17 of its total potential returns per unit of risk. Spire Healthcare Group is currently generating about 0.11 per unit of volatility. If you would invest 21,850 in Spire Healthcare Group on September 24, 2024 and sell it today you would earn a total of 500.00 from holding Spire Healthcare Group or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PureTech Health plc vs. Spire Healthcare Group
Performance |
| Timeline |
| PureTech Health plc |
| Spire Healthcare |
PureTech Health and Spire Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureTech Health and Spire Healthcare
The main advantage of trading using opposite PureTech Health and Spire Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health position performs unexpectedly, Spire Healthcare 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 Spire Healthcare will offset losses from the drop in Spire Healthcare's long position.| PureTech Health vs. Toyota Motor Corp | PureTech Health vs. SoftBank Group Corp | PureTech Health vs. OTP Bank Nyrt | PureTech Health vs. Public Service Enterprise |
| Spire Healthcare vs. Tungsten West PLC | Spire Healthcare vs. Argo Group Limited | Spire Healthcare vs. Hardide PLC | Spire Healthcare vs. Gfinity PLC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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