Correlation Between State Bank and PureTech Health
Can any of the company-specific risk be diversified away by investing in both State Bank and PureTech Health 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 State Bank and PureTech Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and PureTech Health plc, you can compare the effects of market volatilities on State Bank and PureTech Health 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 State Bank with a short position of PureTech Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and PureTech Health.
Diversification Opportunities for State Bank and PureTech Health
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between State and PureTech is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and PureTech Health plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PureTech Health plc and State Bank 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 State Bank of are associated (or correlated) with PureTech Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PureTech Health plc has no effect on the direction of State Bank i.e., State Bank and PureTech Health go up and down completely randomly.
Pair Corralation between State Bank and PureTech Health
Assuming the 90 days trading horizon State Bank of is expected to under-perform the PureTech Health. But the stock apears to be less risky and, when comparing its historical volatility, State Bank of is 1.29 times less risky than PureTech Health. The stock trades about -0.14 of its potential returns per unit of risk. The PureTech Health plc is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 15,460 in PureTech Health plc on November 3, 2024 and sell it today you would lose (480.00) from holding PureTech Health plc or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. PureTech Health plc
Performance |
| Timeline |
| State Bank |
| PureTech Health plc |
State Bank and PureTech Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and PureTech Health
The main advantage of trading using opposite State Bank and PureTech Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, PureTech Health 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 PureTech Health will offset losses from the drop in PureTech Health's long position.| State Bank vs. Axway Software SA | State Bank vs. Allianz Technology Trust | State Bank vs. Target Healthcare REIT | State Bank vs. Xeros Technology Group |
| PureTech Health vs. Ecclesiastical Insurance Office | PureTech Health vs. Ion Beam Applications | PureTech Health vs. Alliance Data Systems | PureTech Health vs. Gamma Communications 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |