Correlation Between Walmart and Cellnex Telecom

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

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

Diversification Opportunities for Walmart and Cellnex Telecom

0.1

Correlation Coefficient

Walmart  Cellnex Telecom

Average diversification

The 3 months correlation between Walmart and Cellnex is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Walmart 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 Walmart 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 Walmart 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 Walmart i.e., Walmart and Cellnex Telecom go up and down completely randomly.

Pair Corralation between Walmart and Cellnex Telecom

Assuming the 90 days trading horizon Walmart is expected to generate 19.68 times less return on investment than Cellnex Telecom. But when comparing it to its historical volatility, Walmart is 37.57 times less risky than Cellnex Telecom. It trades about 0.13 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,059  in Cellnex Telecom SA on December 24, 2024 and sell it today you would earn a total of  206.00  from holding Cellnex Telecom SA or generate 6.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Walmart  vs.  Cellnex Telecom SA

Walmart

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Walmart 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

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cellnex Telecom SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cellnex Telecom may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Walmart and Cellnex Telecom

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

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.