Correlation Between Asturiana and Cellnex Telecom

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Can any of the company-specific risk be diversified away by investing in both Asturiana 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 Asturiana and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asturiana de Laminados and Cellnex Telecom SA, you can compare the effects of market volatilities on Asturiana 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 Asturiana with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asturiana and Cellnex Telecom.

Diversification Opportunities for Asturiana and Cellnex Telecom

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Asturiana and Cellnex is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Asturiana de Laminados 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 Asturiana 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 Asturiana de Laminados 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 Asturiana i.e., Asturiana and Cellnex Telecom go up and down completely randomly.

Pair Corralation between Asturiana and Cellnex Telecom

Assuming the 90 days trading horizon Asturiana de Laminados is expected to under-perform the Cellnex Telecom. In addition to that, Asturiana is 3.12 times more volatile than Cellnex Telecom SA. It trades about -0.03 of its total potential returns per unit of risk. Cellnex Telecom SA is currently generating about 0.0 per unit of volatility. If you would invest  3,355  in Cellnex Telecom SA on September 14, 2024 and sell it today you would lose (57.00) from holding Cellnex Telecom SA or give up 1.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Asturiana de Laminados  vs.  Cellnex Telecom SA

 Performance 
       Timeline  
Asturiana de Laminados 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Asturiana de Laminados has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Asturiana is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Cellnex Telecom SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cellnex Telecom SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Asturiana and Cellnex Telecom Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Asturiana and Cellnex Telecom

The main advantage of trading using opposite Asturiana and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asturiana 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.
The idea behind Asturiana de Laminados and Cellnex Telecom SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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