Correlation Between Renta 4 and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Renta 4 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 Renta 4 and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renta 4 Banco and Cellnex Telecom SA, you can compare the effects of market volatilities on Renta 4 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 Renta 4 with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renta 4 and Cellnex Telecom.
Diversification Opportunities for Renta 4 and Cellnex Telecom
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Renta and Cellnex is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Renta 4 Banco 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 Renta 4 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 Renta 4 Banco 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 Renta 4 i.e., Renta 4 and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Renta 4 and Cellnex Telecom
Assuming the 90 days horizon Renta 4 Banco is expected to generate 1.04 times more return on investment than Cellnex Telecom. However, Renta 4 is 1.04 times more volatile than Cellnex Telecom SA. It trades about 0.23 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.08 per unit of risk. If you would invest 1,172 in Renta 4 Banco on August 30, 2024 and sell it today you would earn a total of 118.00 from holding Renta 4 Banco or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Renta 4 Banco vs. Cellnex Telecom SA
Performance |
| Timeline |
| Renta 4 Banco |
| Cellnex Telecom SA |
Renta 4 and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renta 4 and Cellnex Telecom
The main advantage of trading using opposite Renta 4 and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renta 4 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.| Renta 4 vs. Grupo Catalana Occidente | Renta 4 vs. Miquel y Costas | Renta 4 vs. Faes Farma SA | Renta 4 vs. Azkoyen |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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