Correlation Between Cellnex Telecom and Atresmedia

Can any of the company-specific risk be diversified away by investing in both Cellnex Telecom and Atresmedia 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 Atresmedia 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 Atresmedia, you can compare the effects of market volatilities on Cellnex Telecom and Atresmedia 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 Atresmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cellnex Telecom and Atresmedia.

Diversification Opportunities for Cellnex Telecom and Atresmedia

0.15

Correlation Coefficient

Cellnex Telecom  Atresmedia

Average diversification

The 3 months correlation between Cellnex and Atresmedia is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Atresmedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia 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 Atresmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Atresmedia go up and down completely randomly.

Pair Corralation between Cellnex Telecom and Atresmedia

Assuming the 90 days trading horizon Cellnex Telecom SA is expected to under-perform the Atresmedia. In addition to that, Cellnex Telecom is 1.18 times more volatile than Atresmedia. It trades about -0.22 of its total potential returns per unit of risk. Atresmedia is currently generating about -0.01 per unit of volatility. If you would invest  451.00  in Atresmedia on October 15, 2024 and sell it today you would lose (6.00) from holding Atresmedia or give up 1.33% of portfolio value over 90 days.

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

Cellnex Telecom SA  vs.  Atresmedia

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.

Atresmedia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atresmedia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Atresmedia 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 Atresmedia

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

The idea behind Cellnex Telecom SA and Atresmedia 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.