Correlation Between Cellnex Telecom and Industria

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

Diversification Opportunities for Cellnex Telecom and Industria

0.48

Correlation Coefficient

Cellnex Telecom  Industria

Very weak diversification

The 3 months correlation between Cellnex and Industria is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Industria de Diseno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industria de Diseno 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 Industria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industria de Diseno has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Industria go up and down completely randomly.

Pair Corralation between Cellnex Telecom and Industria

Assuming the 90 days trading horizon Cellnex Telecom SA is expected to generate 1.07 times more return on investment than Industria. However, Cellnex Telecom is 1.07 times more volatile than Industria de Diseno. It trades about 0.02 of its potential returns per unit of risk. Industria de Diseno is currently generating about -0.02 per unit of risk. If you would invest  3,390  in Cellnex Telecom SA on December 1, 2024 and sell it today you would earn a total of  54.00  from holding Cellnex Telecom SA or generate 1.59% return on investment over 90 days.

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

Cellnex Telecom SA  vs.  Industria de Diseno

Cellnex Telecom SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cellnex Telecom SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Cellnex Telecom is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Industria de Diseno

Risk-Adjusted Performance

Very Weak

Over the last 90 days Industria de Diseno has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Industria 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 Industria

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

The idea behind Cellnex Telecom SA and Industria de Diseno 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.