Correlation Between Acerinox and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Acerinox 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 Acerinox and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acerinox and Cellnex Telecom SA, you can compare the effects of market volatilities on Acerinox 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 Acerinox with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acerinox and Cellnex Telecom.
Diversification Opportunities for Acerinox and Cellnex Telecom
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Acerinox and Cellnex is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Acerinox 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 Acerinox 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 Acerinox 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 Acerinox i.e., Acerinox and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Acerinox and Cellnex Telecom
Assuming the 90 days trading horizon Acerinox is expected to generate 1.24 times more return on investment than Cellnex Telecom. However, Acerinox is 1.24 times more volatile than Cellnex Telecom SA. It trades about 0.09 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.13 per unit of risk. If you would invest 908.00 in Acerinox on August 29, 2024 and sell it today you would earn a total of 36.00 from holding Acerinox or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acerinox vs. Cellnex Telecom SA
Performance |
| Timeline |
| Acerinox |
| Cellnex Telecom SA |
Acerinox and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acerinox and Cellnex Telecom
The main advantage of trading using opposite Acerinox and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acerinox 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.| Acerinox vs. ACS Actividades de | Acerinox vs. ArcelorMittal SA | Acerinox vs. Mapfre | Acerinox vs. Ferrovial |
| Cellnex Telecom vs. Mapfre | Cellnex Telecom vs. ENCE Energa y | Cellnex Telecom vs. Acerinox | Cellnex Telecom vs. Enags SA |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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