Correlation Between PureTech Health and Power Metal

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

Diversification Opportunities for PureTech Health and Power Metal

0.21

Correlation Coefficient

PureTech Health  Power Metal

Modest diversification

The 3 months correlation between PureTech and Power is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Power Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Metal Resources 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 Power Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Metal Resources has no effect on the direction of PureTech Health i.e., PureTech Health and Power Metal go up and down completely randomly.

Pair Corralation between PureTech Health and Power Metal

Assuming the 90 days trading horizon PureTech Health is expected to generate 1.7 times less return on investment than Power Metal. But when comparing it to its historical volatility, PureTech Health plc is 1.79 times less risky than Power Metal. It trades about 0.04 of its potential returns per unit of risk. Power Metal Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,325  in Power Metal Resources on May 20, 2025 and sell it today you would earn a total of  75.00  from holding Power Metal Resources or generate 5.66% return on investment over 90 days.

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

PureTech Health plc  vs.  Power Metal Resources

PureTech Health plc

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in PureTech Health plc are ranked lower than 3 (%) 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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Power Metal Resources

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Power Metal Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Power Metal may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with PureTech Health and Power Metal

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

The idea behind PureTech Health plc and Power Metal Resources 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.