Correlation Between Edita Food and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Edita Food 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 Edita Food and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edita Food Industries and Cellnex Telecom SA, you can compare the effects of market volatilities on Edita Food 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 Edita Food with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edita Food and Cellnex Telecom.
Diversification Opportunities for Edita Food and Cellnex Telecom
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Edita and Cellnex is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Edita Food Industries 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 Edita Food 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 Edita Food Industries 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 Edita Food i.e., Edita Food and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Edita Food and Cellnex Telecom
Assuming the 90 days trading horizon Edita Food Industries is expected to generate 0.43 times more return on investment than Cellnex Telecom. However, Edita Food Industries is 2.35 times less risky than Cellnex Telecom. It trades about 0.21 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about 0.05 per unit of risk. If you would invest 195.00 in Edita Food Industries on September 13, 2024 and sell it today you would earn a total of 5.00 from holding Edita Food Industries or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edita Food Industries vs. Cellnex Telecom SA
Performance |
| Timeline |
| Edita Food Industries |
| Cellnex Telecom SA |
Edita Food and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edita Food and Cellnex Telecom
The main advantage of trading using opposite Edita Food and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edita Food 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.| Edita Food vs. Walmart | Edita Food vs. BYD Co | Edita Food vs. Volkswagen AG Non Vtg | Edita Food vs. Compass Group PLC |
| Cellnex Telecom vs. Samsung Electronics Co | Cellnex Telecom vs. Samsung Electronics Co | Cellnex Telecom vs. Hyundai Motor | Cellnex Telecom vs. Reliance Industries Ltd |
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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