Correlation Between Cellnex Telecom and Elaia Investment
Can any of the company-specific risk be diversified away by investing in both Cellnex Telecom and Elaia 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 Elaia 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 Elaia Investment Spain, you can compare the effects of market volatilities on Cellnex Telecom and Elaia 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 Elaia Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cellnex Telecom and Elaia Investment.
Diversification Opportunities for Cellnex Telecom and Elaia Investment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cellnex and Elaia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Elaia Investment Spain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elaia Investment Spain 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 Elaia Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elaia Investment Spain has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Elaia Investment go up and down completely randomly.
Pair Corralation between Cellnex Telecom and Elaia Investment
Assuming the 90 days trading horizon Cellnex Telecom SA is expected to generate 0.34 times more return on investment than Elaia Investment. However, Cellnex Telecom SA is 2.9 times less risky than Elaia Investment. It trades about -0.25 of its potential returns per unit of risk. Elaia Investment Spain is currently generating about -0.21 per unit of risk. If you would invest 3,470 in Cellnex Telecom SA on August 24, 2024 and sell it today you would lose (316.00) from holding Cellnex Telecom SA or give up 9.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cellnex Telecom SA vs. Elaia Investment Spain
Performance |
| Timeline |
| Cellnex Telecom SA |
| Elaia Investment Spain |
Cellnex Telecom and Elaia Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cellnex Telecom and Elaia Investment
The main advantage of trading using opposite Cellnex Telecom and Elaia Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cellnex Telecom position performs unexpectedly, Elaia 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 Elaia Investment will offset losses from the drop in Elaia Investment's long position.| Cellnex Telecom vs. Grifols SA | Cellnex Telecom vs. Aena SA | Cellnex Telecom vs. ACS Actividades de | Cellnex Telecom vs. Ferrovial |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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