Correlation Between Aurora Investment and Cellnex Telecom

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

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

Diversification Opportunities for Aurora Investment and Cellnex Telecom

0.78

Correlation Coefficient

Aurora Investment  Cellnex Telecom

Poor diversification

The 3 months correlation between Aurora and Cellnex is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust 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 Aurora Investment 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 Aurora Investment Trust 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 Aurora Investment i.e., Aurora Investment and Cellnex Telecom go up and down completely randomly.

Pair Corralation between Aurora Investment and Cellnex Telecom

Assuming the 90 days trading horizon Aurora Investment Trust is expected to generate 0.85 times more return on investment than Cellnex Telecom. However, Aurora Investment Trust is 1.17 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 -0.14 per unit of risk. If you would invest  24,400  in Aurora Investment Trust on October 6, 2024 and sell it today you would lose (1,600) from holding Aurora Investment Trust or give up 6.56% of portfolio value over 90 days.

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

Aurora Investment Trust  vs.  Cellnex Telecom SA

Aurora Investment Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurora Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 weak 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 Aurora Investment and Cellnex Telecom

The main advantage of trading using opposite Aurora Investment and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Investment 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 Aurora Investment Trust 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.