Correlation Between Cellnex Telecom and Soltec Power

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

Diversification Opportunities for Cellnex Telecom and Soltec Power

0.0

Correlation Coefficient

Cellnex Telecom  Soltec Power

Pay attention - limited upside

The 3 months correlation between Cellnex and Soltec is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Soltec Power Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soltec Power Holdings 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 Soltec Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soltec Power Holdings has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Soltec Power go up and down completely randomly.

Pair Corralation between Cellnex Telecom and Soltec Power

If you would invest  2,964  in Cellnex Telecom SA on October 20, 2024 and sell it today you would earn a total of  249.00  from holding Cellnex Telecom SA or generate 8.4% return on investment over 90 days.

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

Cellnex Telecom SA  vs.  Soltec Power Holdings

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.

Soltec Power Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Soltec Power Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Soltec Power 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 Soltec Power

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

The idea behind Cellnex Telecom SA and Soltec Power Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.