Correlation Between Spire Healthcare and PureTech Health
Can any of the company-specific risk be diversified away by investing in both Spire Healthcare 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 Spire Healthcare and PureTech Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Healthcare Group and PureTech Health plc, you can compare the effects of market volatilities on Spire Healthcare 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 Spire Healthcare with a short position of PureTech Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Healthcare and PureTech Health.
Diversification Opportunities for Spire Healthcare and PureTech Health
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spire and PureTech is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare Group 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 Spire Healthcare 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 Spire Healthcare Group 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 Spire Healthcare i.e., Spire Healthcare and PureTech Health go up and down completely randomly.
Pair Corralation between Spire Healthcare and PureTech Health
Assuming the 90 days trading horizon Spire Healthcare Group is expected to generate 0.43 times more return on investment than PureTech Health. However, Spire Healthcare Group is 2.3 times less risky than PureTech Health. It trades about -0.03 of its potential returns per unit of risk. PureTech Health plc is currently generating about -0.34 per unit of risk. If you would invest 22,600 in Spire Healthcare Group on October 13, 2024 and sell it today you would lose (150.00) from holding Spire Healthcare Group or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Healthcare Group vs. PureTech Health plc
Performance |
| Timeline |
| Spire Healthcare |
| PureTech Health plc |
Spire Healthcare and PureTech Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Healthcare and PureTech Health
The main advantage of trading using opposite Spire Healthcare and PureTech Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Healthcare 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.| Spire Healthcare vs. Samsung Electronics Co | Spire Healthcare vs. Samsung Electronics Co | Spire Healthcare vs. Toyota Motor Corp | Spire Healthcare vs. Reliance Industries Ltd |
| PureTech Health vs. Trainline Plc | PureTech Health vs. Tavistock Investments Plc | PureTech Health vs. LPKF Laser Electronics | PureTech Health vs. Monks Investment Trust |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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