Correlation Between Metso Outotec and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Metso Outotec 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 Metso Outotec and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metso Outotec Corp and Cellnex Telecom SA, you can compare the effects of market volatilities on Metso Outotec 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 Metso Outotec with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metso Outotec and Cellnex Telecom.
Diversification Opportunities for Metso Outotec and Cellnex Telecom
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metso and Cellnex is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Metso Outotec Corp 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 Metso Outotec 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 Metso Outotec Corp 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 Metso Outotec i.e., Metso Outotec and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Metso Outotec and Cellnex Telecom
Assuming the 90 days trading horizon Metso Outotec Corp is expected to generate 1.2 times more return on investment than Cellnex Telecom. However, Metso Outotec is 1.2 times more volatile than Cellnex Telecom SA. It trades about 0.0 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about 0.0 per unit of risk. If you would invest 871.00 in Metso Outotec Corp on September 3, 2024 and sell it today you would lose (33.00) from holding Metso Outotec Corp or give up 3.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metso Outotec Corp vs. Cellnex Telecom SA
Performance |
| Timeline |
| Metso Outotec Corp |
| Cellnex Telecom SA |
Metso Outotec and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metso Outotec and Cellnex Telecom
The main advantage of trading using opposite Metso Outotec and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metso Outotec 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.| Metso Outotec vs. Associated British Foods | Metso Outotec vs. Games Workshop Group | Metso Outotec vs. Compal Electronics GDR | Metso Outotec vs. MoneysupermarketCom Group PLC |
| Cellnex Telecom vs. Tatton Asset Management | Cellnex Telecom vs. Batm Advanced Communications | Cellnex Telecom vs. New Residential Investment | Cellnex Telecom vs. Elmos Semiconductor SE |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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