Correlation Between Cellnex Telecom and Vonovia SE
Can any of the company-specific risk be diversified away by investing in both Cellnex Telecom and Vonovia SE 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 Vonovia SE 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 Vonovia SE, you can compare the effects of market volatilities on Cellnex Telecom and Vonovia SE 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 Vonovia SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cellnex Telecom and Vonovia SE.
Diversification Opportunities for Cellnex Telecom and Vonovia SE
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cellnex and Vonovia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Vonovia SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vonovia SE 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 Vonovia SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vonovia SE has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Vonovia SE go up and down completely randomly.
Pair Corralation between Cellnex Telecom and Vonovia SE
Assuming the 90 days horizon Cellnex Telecom SA is expected to generate 0.63 times more return on investment than Vonovia SE. However, Cellnex Telecom SA is 1.6 times less risky than Vonovia SE. It trades about -0.24 of its potential returns per unit of risk. Vonovia SE is currently generating about -0.19 per unit of risk. If you would invest 3,824 in Cellnex Telecom SA on August 28, 2024 and sell it today you would lose (335.00) from holding Cellnex Telecom SA or give up 8.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 85.71% |
| Values | Daily Returns |
Cellnex Telecom SA vs. Vonovia SE
Performance |
| Timeline |
| Cellnex Telecom SA |
| Vonovia SE |
Cellnex Telecom and Vonovia SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cellnex Telecom and Vonovia SE
The main advantage of trading using opposite Cellnex Telecom and Vonovia SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cellnex Telecom position performs unexpectedly, Vonovia SE 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 Vonovia SE will offset losses from the drop in Vonovia SE's long position.| Cellnex Telecom vs. CBRE Group Class | Cellnex Telecom vs. Cushman Wakefield plc | Cellnex Telecom vs. Newmark Group | Cellnex Telecom vs. Colliers International Group |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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