Correlation Between PureTech Health and Cellnex Telecom

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

Diversification Opportunities for PureTech Health and Cellnex Telecom

-0.2

Correlation Coefficient

PureTech Health  Cellnex Telecom

Good diversification

The 3 months correlation between PureTech and Cellnex is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Cellnex Telecom SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellnex Telecom SA 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 Cellnex Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellnex Telecom SA has no effect on the direction of PureTech Health i.e., PureTech Health and Cellnex Telecom go up and down completely randomly.

Pair Corralation between PureTech Health and Cellnex Telecom

Assuming the 90 days trading horizon PureTech Health plc is expected to generate 1.58 times more return on investment than Cellnex Telecom. However, PureTech Health is 1.58 times more volatile than Cellnex Telecom SA. It trades about 0.1 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.08 per unit of risk. If you would invest  12,400  in PureTech Health plc on April 23, 2025 and sell it today you would earn a total of  1,420  from holding PureTech Health plc or generate 11.45% return on investment over 90 days.

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

PureTech Health plc  vs.  Cellnex Telecom SA

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 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, PureTech Health may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Cellnex Telecom SA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with PureTech Health and Cellnex Telecom

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

The idea behind PureTech Health plc and Cellnex Telecom SA 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.