Correlation Between Metals Exploration and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Metals Exploration 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 Metals Exploration and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals Exploration Plc and Cellnex Telecom SA, you can compare the effects of market volatilities on Metals Exploration 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 Metals Exploration with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and Cellnex Telecom.
Diversification Opportunities for Metals Exploration and Cellnex Telecom
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Metals and Cellnex is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc 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 Metals Exploration 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 Metals Exploration Plc 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 Metals Exploration i.e., Metals Exploration and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Metals Exploration and Cellnex Telecom
Assuming the 90 days trading horizon Metals Exploration Plc is expected to generate 2.39 times more return on investment than Cellnex Telecom. However, Metals Exploration is 2.39 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 -0.01 per unit of risk. If you would invest 155.00 in Metals Exploration Plc on October 27, 2024 and sell it today you would earn a total of 440.00 from holding Metals Exploration Plc or generate 283.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Metals Exploration Plc vs. Cellnex Telecom SA
Performance |
| Timeline |
| Metals Exploration Plc |
| Cellnex Telecom SA |
Metals Exploration and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and Cellnex Telecom
The main advantage of trading using opposite Metals Exploration and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration 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.| Metals Exploration vs. Chrysalis Investments | Metals Exploration vs. Herald Investment Trust | Metals Exploration vs. New Residential Investment | Metals Exploration vs. Monks Investment Trust |
| Cellnex Telecom vs. Zinc Media Group | Cellnex Telecom vs. Catalyst Media Group | Cellnex Telecom vs. G5 Entertainment AB | Cellnex Telecom vs. Arrow Electronics |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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