Correlation Between PureTech Health and Cel AI

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

Diversification Opportunities for PureTech Health and Cel AI

0.52

Correlation Coefficient

PureTech Health  Cel AI

Very weak diversification

The 3 months correlation between PureTech and Cel is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and Cel AI PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cel AI 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 Cel AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cel AI PLC has no effect on the direction of PureTech Health i.e., PureTech Health and Cel AI go up and down completely randomly.

Pair Corralation between PureTech Health and Cel AI

Assuming the 90 days trading horizon PureTech Health is expected to generate 12.79 times less return on investment than Cel AI. But when comparing it to its historical volatility, PureTech Health plc is 7.93 times less risky than Cel AI. It trades about 0.04 of its potential returns per unit of risk. Cel AI PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  22.00  in Cel AI PLC on April 21, 2025 and sell it today you would lose (3.00) from holding Cel AI PLC or give up 13.64% 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.  Cel AI 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.

Cel AI PLC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cel AI PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cel AI unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PureTech Health and Cel AI

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

The idea behind PureTech Health plc and Cel AI 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.