Correlation Between Asia Pptys and Cellnex Telecom

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

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

Diversification Opportunities for Asia Pptys and Cellnex Telecom

0.54

Correlation Coefficient

Asia Pptys  Cellnex Telecom

Very weak diversification

The 3 months correlation between Asia and Cellnex is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Asia Pptys 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 Asia Pptys 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 Asia Pptys 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 Asia Pptys i.e., Asia Pptys and Cellnex Telecom go up and down completely randomly.

Pair Corralation between Asia Pptys and Cellnex Telecom

Given the investment horizon of 90 days Asia Pptys is expected to generate 10.03 times more return on investment than Cellnex Telecom. However, Asia Pptys is 10.03 times more volatile than Cellnex Telecom SA. It trades about -0.01 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  9.00  in Asia Pptys on September 4, 2024 and sell it today you would lose (4.00) from holding Asia Pptys or give up 44.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Asia Pptys  vs.  Cellnex Telecom SA

Asia Pptys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Pptys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company 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. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Asia Pptys and Cellnex Telecom

The main advantage of trading using opposite Asia Pptys and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Pptys 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 Asia Pptys 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.