Correlation Between Cellnex Telecom and Media Investment
Can any of the company-specific risk be diversified away by investing in both Cellnex Telecom and Media Investment 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 Media Investment 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 Media Investment Optimization, you can compare the effects of market volatilities on Cellnex Telecom and Media Investment 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 Media Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cellnex Telecom and Media Investment.
Diversification Opportunities for Cellnex Telecom and Media Investment
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cellnex and Media is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Media Investment Optimization in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Investment Opt 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 Media Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Investment Opt has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Media Investment go up and down completely randomly.
Pair Corralation between Cellnex Telecom and Media Investment
Assuming the 90 days trading horizon Cellnex Telecom SA is expected to generate 1.59 times more return on investment than Media Investment. However, Cellnex Telecom is 1.59 times more volatile than Media Investment Optimization. It trades about 0.07 of its potential returns per unit of risk. Media Investment Optimization is currently generating about -0.32 per unit of risk. If you would invest 3,056 in Cellnex Telecom SA on October 26, 2024 and sell it today you would earn a total of 78.00 from holding Cellnex Telecom SA or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Cellnex Telecom SA vs. Media Investment Optimization
Performance |
| Timeline |
| Cellnex Telecom SA |
| Media Investment Opt |
Cellnex Telecom and Media Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cellnex Telecom and Media Investment
The main advantage of trading using opposite Cellnex Telecom and Media Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cellnex Telecom position performs unexpectedly, Media Investment 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 Media Investment will offset losses from the drop in Media Investment's long position.| Cellnex Telecom vs. Grifols SA | Cellnex Telecom vs. Aena SA | Cellnex Telecom vs. ACS Actividades de | Cellnex Telecom vs. Ferrovial SA |
| Media Investment vs. Elaia Investment Spain | Media Investment vs. Cox ABG Group | Media Investment vs. Tier1 Technology SA | Media Investment vs. Ibervalles SOCIMI 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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