Correlation Between Cushman Wakefield and Cellnex Telecom

Can any of the company-specific risk be diversified away by investing in both Cushman Wakefield and Cellnex Telecom 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 Cushman Wakefield and Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cushman Wakefield plc and Cellnex Telecom SA, you can compare the effects of market volatilities on Cushman Wakefield and Cellnex Telecom 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 Cushman Wakefield with a short position of Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cushman Wakefield and Cellnex Telecom.

Diversification Opportunities for Cushman Wakefield and Cellnex Telecom

-0.14

Correlation Coefficient

Cushman Wakefield  Cellnex Telecom

Good diversification

The 3 months correlation between Cushman and Cellnex is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cushman Wakefield plc and Cellnex Telecom SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellnex Telecom SA and Cushman Wakefield 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 Cushman Wakefield plc are associated (or correlated) with Cellnex Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellnex Telecom SA has no effect on the direction of Cushman Wakefield i.e., Cushman Wakefield and Cellnex Telecom go up and down completely randomly.

Pair Corralation between Cushman Wakefield and Cellnex Telecom

Considering the 90-day investment horizon Cushman Wakefield plc is expected to generate 1.29 times more return on investment than Cellnex Telecom. However, Cushman Wakefield is 1.29 times more volatile than Cellnex Telecom SA. It trades about 0.0 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.02 per unit of risk. If you would invest  1,423  in Cushman Wakefield plc on October 12, 2024 and sell it today you would lose (243.00) from holding Cushman Wakefield plc or give up 17.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.68%
Values	Daily Returns

Cushman Wakefield plc  vs.  Cellnex Telecom SA

Cushman Wakefield plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cushman Wakefield plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Cushman Wakefield is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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 unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Cushman Wakefield and Cellnex Telecom

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

The idea behind Cushman Wakefield plc and Cellnex Telecom 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.