Correlation Between IBEX 35 and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both IBEX 35 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 IBEX 35 and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBEX 35 Index and Cellnex Telecom SA, you can compare the effects of market volatilities on IBEX 35 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 IBEX 35 with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBEX 35 and Cellnex Telecom.
Diversification Opportunities for IBEX 35 and Cellnex Telecom
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IBEX and Cellnex is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding IBEX 35 Index 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 IBEX 35 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 IBEX 35 Index 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 IBEX 35 i.e., IBEX 35 and Cellnex Telecom go up and down completely randomly.
Pair Corralation between IBEX 35 and Cellnex Telecom
Assuming the 90 days trading horizon IBEX 35 Index is expected to generate 0.53 times more return on investment than Cellnex Telecom. However, IBEX 35 Index is 1.88 times less risky than Cellnex Telecom. It trades about 0.08 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about 0.01 per unit of risk. If you would invest 828,920 in IBEX 35 Index on August 30, 2024 and sell it today you would earn a total of 329,030 from holding IBEX 35 Index or generate 39.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
IBEX 35 Index vs. Cellnex Telecom SA
Performance |
| Timeline |
IBEX 35 and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
IBEX 35 Index
Pair trading matchups for IBEX 35
Cellnex Telecom SA
Pair trading matchups for Cellnex Telecom
Pair Trading with IBEX 35 and Cellnex Telecom
The main advantage of trading using opposite IBEX 35 and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBEX 35 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.| IBEX 35 vs. Azaria Rental SOCIMI | IBEX 35 vs. Tier1 Technology SA | IBEX 35 vs. Hispanotels Inversiones SOCIMI | IBEX 35 vs. NH Hoteles |
| Cellnex Telecom vs. ACS Actividades de | Cellnex Telecom vs. Ferrovial | Cellnex Telecom vs. Melia Hotels | Cellnex Telecom vs. Metrovacesa SA |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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