Correlation Between Cellnex Telecom and Federal Realty
Can any of the company-specific risk be diversified away by investing in both Cellnex Telecom and Federal Realty 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 Cellnex Telecom and Federal Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cellnex Telecom SA and Federal Realty Investment, you can compare the effects of market volatilities on Cellnex Telecom and Federal Realty 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 Cellnex Telecom with a short position of Federal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cellnex Telecom and Federal Realty.
Diversification Opportunities for Cellnex Telecom and Federal Realty
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cellnex and Federal is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Federal Realty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Realty Investment and Cellnex Telecom 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 Cellnex Telecom SA are associated (or correlated) with Federal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Realty Investment has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Federal Realty go up and down completely randomly.
Pair Corralation between Cellnex Telecom and Federal Realty
Assuming the 90 days trading horizon Cellnex Telecom is expected to generate 3.23 times less return on investment than Federal Realty. In addition to that, Cellnex Telecom is 1.2 times more volatile than Federal Realty Investment. It trades about 0.01 of its total potential returns per unit of risk. Federal Realty Investment is currently generating about 0.03 per unit of volatility. If you would invest 10,067 in Federal Realty Investment on September 3, 2024 and sell it today you would earn a total of 1,686 from holding Federal Realty Investment or generate 16.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.19% |
| Values | Daily Returns |
Cellnex Telecom SA vs. Federal Realty Investment
Performance |
| Timeline |
| Cellnex Telecom SA |
| Federal Realty Investment |
Cellnex Telecom and Federal Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cellnex Telecom and Federal Realty
The main advantage of trading using opposite Cellnex Telecom and Federal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cellnex Telecom position performs unexpectedly, Federal Realty 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 Federal Realty will offset losses from the drop in Federal Realty's long position.| Cellnex Telecom vs. Tatton Asset Management | Cellnex Telecom vs. Batm Advanced Communications | Cellnex Telecom vs. New Residential Investment | Cellnex Telecom vs. Elmos Semiconductor SE |
| Federal Realty vs. Amedeo Air Four | Federal Realty vs. Sealed Air Corp | Federal Realty vs. European Metals Holdings | Federal Realty vs. Pentair PLC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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