Correlation Between Automatic Data and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Automatic Data 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 Automatic Data and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Data Processing and Cellnex Telecom SA, you can compare the effects of market volatilities on Automatic Data 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 Automatic Data with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and Cellnex Telecom.
Diversification Opportunities for Automatic Data and Cellnex Telecom
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Automatic and Cellnex is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing 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 Automatic Data 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 Automatic Data Processing 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 Automatic Data i.e., Automatic Data and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Automatic Data and Cellnex Telecom
Assuming the 90 days horizon Automatic Data Processing is expected to generate 0.63 times more return on investment than Cellnex Telecom. However, Automatic Data Processing is 1.6 times less risky than Cellnex Telecom. It trades about 0.32 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.12 per unit of risk. If you would invest 26,695 in Automatic Data Processing on August 29, 2024 and sell it today you would earn a total of 2,340 from holding Automatic Data Processing or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automatic Data Processing vs. Cellnex Telecom SA
Performance |
| Timeline |
| Automatic Data Processing |
| Cellnex Telecom SA |
Automatic Data and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and Cellnex Telecom
The main advantage of trading using opposite Automatic Data and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data 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.| Automatic Data vs. Superior Plus Corp | Automatic Data vs. SIVERS SEMICONDUCTORS AB | Automatic Data vs. Talanx AG | Automatic Data vs. 2G ENERGY |
| Cellnex Telecom vs. Goodyear Tire Rubber | Cellnex Telecom vs. VULCAN MATERIALS | Cellnex Telecom vs. GOODYEAR T RUBBER | Cellnex Telecom vs. Magic Software Enterprises |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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