Correlation Between Nasdaq and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Nasdaq 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 Nasdaq and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Cellnex Telecom SA, you can compare the effects of market volatilities on Nasdaq 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 Nasdaq with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Cellnex Telecom.
Diversification Opportunities for Nasdaq and Cellnex Telecom
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nasdaq and Cellnex is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc 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 Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Nasdaq and Cellnex Telecom
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.47 times more return on investment than Cellnex Telecom. However, Nasdaq Inc is 2.11 times less risky than Cellnex Telecom. It trades about 0.01 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.06 per unit of risk. If you would invest 7,954 in Nasdaq Inc on September 19, 2024 and sell it today you would earn a total of 7.00 from holding Nasdaq Inc or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq Inc vs. Cellnex Telecom SA
Performance |
| Timeline |
| Nasdaq Inc |
| Cellnex Telecom SA |
Nasdaq and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Cellnex Telecom
The main advantage of trading using opposite Nasdaq and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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.The idea behind Nasdaq Inc and Cellnex Telecom SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cellnex Telecom vs. Jones Lang LaSalle | Cellnex Telecom vs. Cushman Wakefield plc | Cellnex Telecom vs. Colliers International Group | Cellnex Telecom vs. CoStar 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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