Correlation Between Labiana Health and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Labiana Health 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 Labiana Health and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Labiana Health SA and Cellnex Telecom SA, you can compare the effects of market volatilities on Labiana Health 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 Labiana Health with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labiana Health and Cellnex Telecom.
Diversification Opportunities for Labiana Health and Cellnex Telecom
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Labiana and Cellnex is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Labiana Health SA 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 Labiana Health 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 Labiana Health SA 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 Labiana Health i.e., Labiana Health and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Labiana Health and Cellnex Telecom
Assuming the 90 days trading horizon Labiana Health SA is expected to under-perform the Cellnex Telecom. In addition to that, Labiana Health is 2.62 times more volatile than Cellnex Telecom SA. It trades about -0.17 of its total potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.25 per unit of volatility. If you would invest 3,470 in Cellnex Telecom SA on August 24, 2024 and sell it today you would lose (316.00) from holding Cellnex Telecom SA or give up 9.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Labiana Health SA vs. Cellnex Telecom SA
Performance |
| Timeline |
| Labiana Health SA |
| Cellnex Telecom SA |
Labiana Health and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labiana Health and Cellnex Telecom
The main advantage of trading using opposite Labiana Health and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labiana Health 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.| Labiana Health vs. Airbus Group SE | Labiana Health vs. Industria de Diseno | Labiana Health vs. Vale SA | Labiana Health vs. Iberdrola SA |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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