Correlation Between Berner Kantonalbank and Cellnex Telecom

Can any of the company-specific risk be diversified away by investing in both Berner Kantonalbank 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 Berner Kantonalbank and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Berner Kantonalbank AG and Cellnex Telecom SA, you can compare the effects of market volatilities on Berner Kantonalbank 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 Berner Kantonalbank with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berner Kantonalbank and Cellnex Telecom.

Diversification Opportunities for Berner Kantonalbank and Cellnex Telecom

-0.14

Correlation Coefficient

Berner Kantonalbank  Cellnex Telecom

Good diversification

The 3 months correlation between Berner and Cellnex is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Berner Kantonalbank AG 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 Berner Kantonalbank 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 Berner Kantonalbank AG 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 Berner Kantonalbank i.e., Berner Kantonalbank and Cellnex Telecom go up and down completely randomly.

Pair Corralation between Berner Kantonalbank and Cellnex Telecom

Assuming the 90 days trading horizon Berner Kantonalbank AG is expected to under-perform the Cellnex Telecom. But the stock apears to be less risky and, when comparing its historical volatility, Berner Kantonalbank AG is 2.21 times less risky than Cellnex Telecom. The stock trades about -0.04 of its potential returns per unit of risk. The Cellnex Telecom SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3,103  in Cellnex Telecom SA on October 9, 2024 and sell it today you would lose (120.00) from holding Cellnex Telecom SA or give up 3.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.19%
Values	Daily Returns

Berner Kantonalbank AG  vs.  Cellnex Telecom SA

Berner Kantonalbank

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Berner Kantonalbank AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Berner Kantonalbank is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Cellnex Telecom SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cellnex Telecom SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Berner Kantonalbank and Cellnex Telecom

The main advantage of trading using opposite Berner Kantonalbank and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berner Kantonalbank 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 Berner Kantonalbank AG 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.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.