Correlation Between AP Møller and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both AP Møller 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 AP Møller and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Mller and Cellnex Telecom SA, you can compare the effects of market volatilities on AP Møller 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 AP Møller with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Møller and Cellnex Telecom.
Diversification Opportunities for AP Møller and Cellnex Telecom
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DP4B and Cellnex is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller 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 AP Møller 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 AP Mller 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 AP Møller i.e., AP Møller and Cellnex Telecom go up and down completely randomly.
Pair Corralation between AP Møller and Cellnex Telecom
Assuming the 90 days trading horizon AP Mller is expected to generate 1.15 times more return on investment than Cellnex Telecom. However, AP Møller is 1.15 times more volatile than Cellnex Telecom SA. It trades about 0.47 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about 0.1 per unit of risk. If you would invest 136,600 in AP Mller on November 27, 2024 and sell it today you would earn a total of 34,950 from holding AP Mller or generate 25.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Mller vs. Cellnex Telecom SA
Performance |
| Timeline |
| AP Møller |
| Cellnex Telecom SA |
AP Møller and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Møller and Cellnex Telecom
The main advantage of trading using opposite AP Møller and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Møller 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.| AP Møller vs. STMicroelectronics NV | AP Møller vs. LPKF Laser Electronics | AP Møller vs. VIVA WINE GROUP | AP Møller vs. NAKED WINES PLC |
| Cellnex Telecom vs. Sligro Food Group | Cellnex Telecom vs. Cembra Money Bank | Cellnex Telecom vs. JSC Halyk bank | Cellnex Telecom vs. United Natural Foods |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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