Correlation Between PURETECH HEALTH and Intuit

Can any of the company-specific risk be diversified away by investing in both PURETECH HEALTH and Intuit 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 Intuit 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 Intuit Inc, you can compare the effects of market volatilities on PURETECH HEALTH and Intuit 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 Intuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of PURETECH HEALTH and Intuit.

Diversification Opportunities for PURETECH HEALTH and Intuit

0.47

Correlation Coefficient

PURETECH HEALTH  Intuit

Very weak diversification

The 3 months correlation between PURETECH and Intuit is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding PURETECH HEALTH PLC and Intuit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuit Inc 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 Intuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuit Inc has no effect on the direction of PURETECH HEALTH i.e., PURETECH HEALTH and Intuit go up and down completely randomly.

Pair Corralation between PURETECH HEALTH and Intuit

Assuming the 90 days horizon PURETECH HEALTH PLC is expected to under-perform the Intuit. In addition to that, PURETECH HEALTH is 1.52 times more volatile than Intuit Inc. It trades about -0.06 of its total potential returns per unit of risk. Intuit Inc is currently generating about 0.02 per unit of volatility. If you would invest  58,274  in Intuit Inc on October 9, 2024 and sell it today you would earn a total of  2,886  from holding Intuit Inc or generate 4.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.4%
Values	Daily Returns

PURETECH HEALTH PLC  vs.  Intuit Inc

PURETECH HEALTH PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PURETECH HEALTH PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PURETECH HEALTH is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Intuit Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intuit Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Intuit may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PURETECH HEALTH and Intuit

The main advantage of trading using opposite PURETECH HEALTH and Intuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PURETECH HEALTH position performs unexpectedly, Intuit 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 Intuit will offset losses from the drop in Intuit's long position.

The idea behind PURETECH HEALTH PLC and Intuit Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.