Correlation Between Equinix and Crown Castle
Can any of the company-specific risk be diversified away by investing in both Equinix and Crown Castle 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 Equinix and Crown Castle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinix and Crown Castle International, you can compare the effects of market volatilities on Equinix and Crown Castle 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 Equinix with a short position of Crown Castle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinix and Crown Castle.
Diversification Opportunities for Equinix and Crown Castle
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Equinix and Crown is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Equinix and Crown Castle International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Castle Interna and Equinix 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 Equinix are associated (or correlated) with Crown Castle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Castle Interna has no effect on the direction of Equinix i.e., Equinix and Crown Castle go up and down completely randomly.
Pair Corralation between Equinix and Crown Castle
Assuming the 90 days trading horizon Equinix is expected to under-perform the Crown Castle. But the stock apears to be less risky and, when comparing its historical volatility, Equinix is 1.4 times less risky than Crown Castle. The stock trades about -0.19 of its potential returns per unit of risk. The Crown Castle International is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 13,771 in Crown Castle International on November 28, 2024 and sell it today you would lose (10.00) from holding Crown Castle International or give up 0.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinix vs. Crown Castle International
Performance |
| Timeline |
| Equinix |
| Crown Castle Interna |
Equinix and Crown Castle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinix and Crown Castle
The main advantage of trading using opposite Equinix and Crown Castle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinix position performs unexpectedly, Crown Castle 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 Crown Castle will offset losses from the drop in Crown Castle's long position.| Equinix vs. Verizon Communications | Equinix vs. Unifique Telecomunicaes SA | Equinix vs. Public Storage | Equinix vs. Martin Marietta Materials, |
| Crown Castle vs. Monster Beverage | Crown Castle vs. LPL Financial Holdings | Crown Castle vs. Citizens Financial Group, | Crown Castle vs. Prudential Financial |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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