Correlation Between PureTech Health and Hardide PLC

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

Diversification Opportunities for PureTech Health and Hardide PLC

0.5

Correlation Coefficient

PureTech Health  Hardide PLC

Very weak diversification

The 3 months correlation between PureTech and Hardide is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Hardide PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hardide 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 Hardide PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hardide PLC has no effect on the direction of PureTech Health i.e., PureTech Health and Hardide PLC go up and down completely randomly.

Pair Corralation between PureTech Health and Hardide PLC

Assuming the 90 days trading horizon PureTech Health is expected to generate 8.36 times less return on investment than Hardide PLC. But when comparing it to its historical volatility, PureTech Health plc is 1.47 times less risky than Hardide PLC. It trades about 0.04 of its potential returns per unit of risk. Hardide PLC is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  550.00  in Hardide PLC on April 20, 2025 and sell it today you would earn a total of  250.00  from holding Hardide PLC or generate 45.45% return on investment over 90 days.

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

PureTech Health plc  vs.  Hardide PLC

PureTech Health plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PureTech Health plc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, PureTech Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Hardide PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hardide PLC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Hardide PLC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PureTech Health and Hardide PLC

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

The idea behind PureTech Health plc and Hardide 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.