Correlation Between Cellnex Telecom and Ibervalles SOCIMI

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

Diversification Opportunities for Cellnex Telecom and Ibervalles SOCIMI

-0.37

Correlation Coefficient

Cellnex Telecom  Ibervalles SOCIMI

Very good diversification

The 3 months correlation between Cellnex and Ibervalles is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Ibervalles SOCIMI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibervalles SOCIMI 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 Ibervalles SOCIMI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ibervalles SOCIMI has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Ibervalles SOCIMI go up and down completely randomly.

Pair Corralation between Cellnex Telecom and Ibervalles SOCIMI

Assuming the 90 days trading horizon Cellnex Telecom is expected to generate 17.72 times less return on investment than Ibervalles SOCIMI. But when comparing it to its historical volatility, Cellnex Telecom SA is 1.07 times less risky than Ibervalles SOCIMI. It trades about 0.0 of its potential returns per unit of risk. Ibervalles SOCIMI SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  555.00  in Ibervalles SOCIMI SA on October 7, 2024 and sell it today you would earn a total of  75.00  from holding Ibervalles SOCIMI SA or generate 13.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.33%
Values	Daily Returns

Cellnex Telecom SA  vs.  Ibervalles SOCIMI SA

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 unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Ibervalles SOCIMI

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ibervalles SOCIMI SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Ibervalles SOCIMI may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cellnex Telecom and Ibervalles SOCIMI

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

The idea behind Cellnex Telecom SA and Ibervalles SOCIMI 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.