Correlation Between Trupanion and Perceptive Capital
Can any of the company-specific risk be diversified away by investing in both Trupanion and Perceptive Capital 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 Trupanion and Perceptive Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trupanion and Perceptive Capital Solutions, you can compare the effects of market volatilities on Trupanion and Perceptive Capital 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 Trupanion with a short position of Perceptive Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trupanion and Perceptive Capital.
Diversification Opportunities for Trupanion and Perceptive Capital
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trupanion and Perceptive is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Trupanion and Perceptive Capital Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perceptive Capital and Trupanion 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 Trupanion are associated (or correlated) with Perceptive Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perceptive Capital has no effect on the direction of Trupanion i.e., Trupanion and Perceptive Capital go up and down completely randomly.
Pair Corralation between Trupanion and Perceptive Capital
Given the investment horizon of 90 days Trupanion is expected to generate 20.39 times more return on investment than Perceptive Capital. However, Trupanion is 20.39 times more volatile than Perceptive Capital Solutions. It trades about 0.04 of its potential returns per unit of risk. Perceptive Capital Solutions is currently generating about 0.16 per unit of risk. If you would invest 5,375 in Trupanion on September 13, 2024 and sell it today you would earn a total of 80.50 from holding Trupanion or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trupanion vs. Perceptive Capital Solutions
Performance |
| Timeline |
| Trupanion |
| Perceptive Capital |
Trupanion and Perceptive Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trupanion and Perceptive Capital
The main advantage of trading using opposite Trupanion and Perceptive Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trupanion position performs unexpectedly, Perceptive Capital 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 Perceptive Capital will offset losses from the drop in Perceptive Capital's long position.| Trupanion vs. First American | Trupanion vs. Assurant | Trupanion vs. NMI Holdings | Trupanion vs. MGIC Investment Corp |
| Perceptive Capital vs. Atlanticus Holdings | Perceptive Capital vs. Great Elm Capital | Perceptive Capital vs. Aquagold International | Perceptive Capital vs. Morningstar Unconstrained Allocation |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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