Correlation Between PureTech Health and CATLIN GROUP

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

Diversification Opportunities for PureTech Health and CATLIN GROUP

-0.16

Correlation Coefficient

PureTech Health  CATLIN GROUP

Good diversification

The 3 months correlation between PureTech and CATLIN is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP 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 CATLIN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATLIN GROUP has no effect on the direction of PureTech Health i.e., PureTech Health and CATLIN GROUP go up and down completely randomly.

Pair Corralation between PureTech Health and CATLIN GROUP

Assuming the 90 days trading horizon PureTech Health is expected to generate 74.74 times less return on investment than CATLIN GROUP. But when comparing it to its historical volatility, PureTech Health plc is 59.05 times less risky than CATLIN GROUP. It trades about 0.13 of its potential returns per unit of risk. CATLIN GROUP is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  8,450  in CATLIN GROUP on April 9, 2025 and sell it today you would lose (500.00) from holding CATLIN GROUP or give up 5.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PureTech Health plc  vs.  CATLIN GROUP

PureTech Health plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PureTech Health plc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, PureTech Health unveiled solid returns over the last few months and may actually be approaching a breakup point.

CATLIN GROUP

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CATLIN GROUP are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, CATLIN GROUP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PureTech Health and CATLIN GROUP

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

The idea behind PureTech Health plc and CATLIN GROUP 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.