Correlation Between Hermes International and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Hermes International 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 Hermes International and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hermes International SCA and Cellnex Telecom SA, you can compare the effects of market volatilities on Hermes International 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 Hermes International with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hermes International and Cellnex Telecom.
Diversification Opportunities for Hermes International and Cellnex Telecom
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hermes and Cellnex is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hermes International SCA 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 Hermes International 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 Hermes International SCA 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 Hermes International i.e., Hermes International and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Hermes International and Cellnex Telecom
Assuming the 90 days horizon Hermes International SCA is expected to generate 1.07 times more return on investment than Cellnex Telecom. However, Hermes International is 1.07 times more volatile than Cellnex Telecom SA. It trades about 0.09 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.07 per unit of risk. If you would invest 236,500 in Hermes International SCA on November 2, 2024 and sell it today you would earn a total of 46,600 from holding Hermes International SCA or generate 19.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.17% |
| Values | Daily Returns |
Hermes International SCA vs. Cellnex Telecom SA
Performance |
| Timeline |
| Hermes International SCA |
| Cellnex Telecom SA |
Hermes International and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hermes International and Cellnex Telecom
The main advantage of trading using opposite Hermes International and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hermes International 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.| Hermes International vs. Christian Dior SE | Hermes International vs. Burberry Group Plc | Hermes International vs. Compagnie Financiere Richemont | Hermes International vs. Hermes International SA |
| Cellnex Telecom vs. CBRE Group Class | Cellnex Telecom vs. Cushman Wakefield plc | Cellnex Telecom vs. Newmark Group | Cellnex Telecom vs. Colliers International Group |
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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