Correlation Between Cellnex Telecom and Bankinter

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

Diversification Opportunities for Cellnex Telecom and Bankinter

0.21

Correlation Coefficient

Cellnex Telecom  Bankinter

Modest diversification

The 3 months correlation between Cellnex and Bankinter is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Bankinter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter 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 Bankinter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankinter has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Bankinter go up and down completely randomly.

Pair Corralation between Cellnex Telecom and Bankinter

Assuming the 90 days trading horizon Cellnex Telecom SA is expected to under-perform the Bankinter. But the stock apears to be less risky and, when comparing its historical volatility, Cellnex Telecom SA is 1.06 times less risky than Bankinter. The stock trades about -0.08 of its potential returns per unit of risk. The Bankinter is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  771.00  in Bankinter on September 12, 2024 and sell it today you would lose (10.00) from holding Bankinter or give up 1.3% of portfolio value over 90 days.

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

Cellnex Telecom SA  vs.  Bankinter

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 latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Bankinter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bankinter has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Bankinter is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cellnex Telecom and Bankinter

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

The idea behind Cellnex Telecom SA and Bankinter 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.