Correlation Between Cellnex Telecom and Wharf Real

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

Diversification Opportunities for Cellnex Telecom and Wharf Real

0.51

Correlation Coefficient

Cellnex Telecom  Wharf Real

Very weak diversification

The 3 months correlation between Cellnex and Wharf is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Wharf Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wharf Real Estate 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 Wharf Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wharf Real Estate has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Wharf Real go up and down completely randomly.

Pair Corralation between Cellnex Telecom and Wharf Real

Assuming the 90 days horizon Cellnex Telecom SA is expected to under-perform the Wharf Real. But the pink sheet apears to be less risky and, when comparing its historical volatility, Cellnex Telecom SA is 3.19 times less risky than Wharf Real. The pink sheet trades about -0.16 of its potential returns per unit of risk. The Wharf Real Estate is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  270.00  in Wharf Real Estate on September 3, 2024 and sell it today you would earn a total of  19.00  from holding Wharf Real Estate or generate 7.04% 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.  Wharf Real Estate

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.

Wharf Real Estate

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wharf Real Estate are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Wharf Real may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cellnex Telecom and Wharf Real

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

The idea behind Cellnex Telecom SA and Wharf Real Estate 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.