Correlation Between Sparebank and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Sparebank 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 Sparebank and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 SR and Cellnex Telecom SA, you can compare the effects of market volatilities on Sparebank 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 Sparebank with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Cellnex Telecom.
Diversification Opportunities for Sparebank and Cellnex Telecom
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sparebank and Cellnex is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR 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 Sparebank 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 Sparebank 1 SR 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 Sparebank i.e., Sparebank and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Sparebank and Cellnex Telecom
Assuming the 90 days trading horizon Sparebank 1 SR is expected to generate 0.83 times more return on investment than Cellnex Telecom. However, Sparebank 1 SR is 1.21 times less risky than Cellnex Telecom. It trades about 0.07 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.01 per unit of risk. If you would invest 10,398 in Sparebank 1 SR on October 25, 2024 and sell it today you would earn a total of 5,062 from holding Sparebank 1 SR or generate 48.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sparebank 1 SR vs. Cellnex Telecom SA
Performance |
| Timeline |
| Sparebank 1 SR |
| Cellnex Telecom SA |
Sparebank and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Cellnex Telecom
The main advantage of trading using opposite Sparebank and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank 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.| Sparebank vs. Toyota Motor Corp | Sparebank vs. SoftBank Group Corp | Sparebank vs. OTP Bank Nyrt | Sparebank vs. ONEOK Inc |
| Cellnex Telecom vs. Toyota Motor Corp | Cellnex Telecom vs. SoftBank Group Corp | Cellnex Telecom vs. OTP Bank Nyrt | Cellnex Telecom vs. ONEOK Inc |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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