Correlation Between Cellnex Telecom and Markel Corp

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

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

Diversification Opportunities for Cellnex Telecom and Markel Corp

0.71

Correlation Coefficient

Cellnex Telecom  Markel Corp

Poor diversification

The 3 months correlation between Cellnex and Markel is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Markel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markel Corp and Cellnex Telecom 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 Cellnex Telecom SA are associated (or correlated) with Markel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markel Corp has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Markel Corp go up and down completely randomly.

Pair Corralation between Cellnex Telecom and Markel Corp

Assuming the 90 days trading horizon Cellnex Telecom SA is expected to generate 1.06 times more return on investment than Markel Corp. However, Cellnex Telecom is 1.06 times more volatile than Markel Corp. It trades about 0.07 of its potential returns per unit of risk. Markel Corp is currently generating about 0.05 per unit of risk. If you would invest  3,059  in Cellnex Telecom SA on December 24, 2024 and sell it today you would earn a total of  213.00  from holding Cellnex Telecom SA or generate 6.96% return on investment over 90 days.

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

Cellnex Telecom SA  vs.  Markel Corp

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.

Markel Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Markel Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Markel Corp is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cellnex Telecom and Markel Corp

The main advantage of trading using opposite Cellnex Telecom and Markel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cellnex Telecom position performs unexpectedly, Markel Corp 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 Markel Corp will offset losses from the drop in Markel Corp's long position.

The idea behind Cellnex Telecom SA and Markel Corp 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.