Correlation Between PureTech Health and Silence Therapeutics

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

Diversification Opportunities for PureTech Health and Silence Therapeutics

0.3

Correlation Coefficient

PureTech Health  Silence Therapeutics

Weak diversification

The 3 months correlation between PureTech and Silence is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health PLC and Silence Therapeutics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silence Therapeutics 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 Silence Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silence Therapeutics PLC has no effect on the direction of PureTech Health i.e., PureTech Health and Silence Therapeutics go up and down completely randomly.

Pair Corralation between PureTech Health and Silence Therapeutics

Given the investment horizon of 90 days PureTech Health PLC is expected to generate 0.72 times more return on investment than Silence Therapeutics. However, PureTech Health PLC is 1.39 times less risky than Silence Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Silence Therapeutics PLC is currently generating about 0.05 per unit of risk. If you would invest  1,791  in PureTech Health PLC on May 21, 2025 and sell it today you would earn a total of  193.00  from holding PureTech Health PLC or generate 10.78% 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.  Silence Therapeutics PLC

PureTech Health PLC

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in PureTech Health PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, PureTech Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

Silence Therapeutics PLC

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Silence Therapeutics PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady essential indicators, Silence Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PureTech Health and Silence Therapeutics

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

The idea behind PureTech Health PLC and Silence Therapeutics 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.