Correlation Between PureTech Health and Gamma Communications

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

Diversification Opportunities for PureTech Health and Gamma Communications

0.45

Correlation Coefficient

PureTech Health  Gamma Communications

Very weak diversification

The 3 months correlation between PureTech and Gamma is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Gamma Communications PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications 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 Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications PLC has no effect on the direction of PureTech Health i.e., PureTech Health and Gamma Communications go up and down completely randomly.

Pair Corralation between PureTech Health and Gamma Communications

Assuming the 90 days trading horizon PureTech Health plc is expected to generate 1.91 times more return on investment than Gamma Communications. However, PureTech Health is 1.91 times more volatile than Gamma Communications PLC. It trades about 0.01 of its potential returns per unit of risk. Gamma Communications PLC is currently generating about -0.07 per unit of risk. If you would invest  13,400  in PureTech Health plc on July 26, 2025 and sell it today you would lose (20.00) from holding PureTech Health plc or give up 0.15% of portfolio value over 90 days.

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

PureTech Health plc  vs.  Gamma Communications PLC

PureTech Health plc

Risk-Adjusted Performance

Weakest

Over the last 90 days PureTech Health plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Gamma Communications PLC

Risk-Adjusted Performance

Weakest

Over the last 90 days Gamma Communications PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Gamma Communications is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PureTech Health and Gamma Communications

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

The idea behind PureTech Health plc and Gamma Communications 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 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.