Correlation Between One Media and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both One Media 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 One Media and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Media iP and Cellnex Telecom SA, you can compare the effects of market volatilities on One Media 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 One Media with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Media and Cellnex Telecom.
Diversification Opportunities for One Media and Cellnex Telecom
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between One and Cellnex is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding One Media iP 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 One Media 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 One Media iP 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 One Media i.e., One Media and Cellnex Telecom go up and down completely randomly.
Pair Corralation between One Media and Cellnex Telecom
Assuming the 90 days trading horizon One Media iP is expected to under-perform the Cellnex Telecom. In addition to that, One Media is 1.63 times more volatile than Cellnex Telecom SA. It trades about -0.02 of its total potential returns per unit of risk. Cellnex Telecom SA is currently generating about 0.01 per unit of volatility. If you would invest 3,302 in Cellnex Telecom SA on September 2, 2024 and sell it today you would earn a total of 84.00 from holding Cellnex Telecom SA or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
One Media iP vs. Cellnex Telecom SA
Performance |
| Timeline |
| One Media iP |
| Cellnex Telecom SA |
One Media and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Media and Cellnex Telecom
The main advantage of trading using opposite One Media and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Media 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.| One Media vs. Samsung Electronics Co | One Media vs. Samsung Electronics Co | One Media vs. Hyundai Motor | One Media vs. Toyota Motor Corp |
| Cellnex Telecom vs. Datalogic | Cellnex Telecom vs. Sunny Optical Technology | Cellnex Telecom vs. Microchip Technology | Cellnex Telecom vs. Roper Technologies |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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