Correlation Between All Iron and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both All Iron 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 All Iron and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between All Iron Re and Cellnex Telecom SA, you can compare the effects of market volatilities on All Iron 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 All Iron with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of All Iron and Cellnex Telecom.
Diversification Opportunities for All Iron and Cellnex Telecom
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between All and Cellnex is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding All Iron Re 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 All Iron 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 All Iron Re 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 All Iron i.e., All Iron and Cellnex Telecom go up and down completely randomly.
Pair Corralation between All Iron and Cellnex Telecom
Assuming the 90 days trading horizon All Iron Re is expected to generate 0.47 times more return on investment than Cellnex Telecom. However, All Iron Re is 2.12 times less risky than Cellnex Telecom. It trades about 0.08 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.04 per unit of risk. If you would invest 1,090 in All Iron Re on November 3, 2024 and sell it today you would earn a total of 30.00 from holding All Iron Re or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
All Iron Re vs. Cellnex Telecom SA
Performance |
| Timeline |
| All Iron Re |
| Cellnex Telecom SA |
All Iron and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with All Iron and Cellnex Telecom
The main advantage of trading using opposite All Iron and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All Iron 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.| All Iron vs. Tier1 Technology SA | All Iron vs. Naturhouse Health SA | All Iron vs. Inhome Prime Properties | All Iron vs. Plasticos Compuestos 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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