Correlation Between PureTech Health and Camellia Plc

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

Diversification Opportunities for PureTech Health and Camellia Plc

0.38

Correlation Coefficient

PureTech Health  Camellia Plc

Weak diversification

The 3 months correlation between PureTech and Camellia is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Camellia Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia Plc 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 Camellia Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Plc has no effect on the direction of PureTech Health i.e., PureTech Health and Camellia Plc go up and down completely randomly.

Pair Corralation between PureTech Health and Camellia Plc

Assuming the 90 days trading horizon PureTech Health is expected to generate 5.24 times less return on investment than Camellia Plc. But when comparing it to its historical volatility, PureTech Health plc is 1.02 times less risky than Camellia Plc. It trades about 0.06 of its potential returns per unit of risk. Camellia Plc is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  391,203  in Camellia Plc on April 24, 2025 and sell it today you would earn a total of  181,297  from holding Camellia Plc or generate 46.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

PureTech Health plc  vs.  Camellia Plc

PureTech Health plc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PureTech Health plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, PureTech Health may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Camellia Plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Camellia Plc are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Camellia Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PureTech Health and Camellia Plc

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

The idea behind PureTech Health plc and Camellia Plc 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.