Correlation Between Heavitree Brewery and Cellnex Telecom

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

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

Diversification Opportunities for Heavitree Brewery and Cellnex Telecom

-0.25

Correlation Coefficient

Heavitree Brewery  Cellnex Telecom

Very good diversification

The 3 months correlation between Heavitree and Cellnex is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Heavitree Brewery 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 Heavitree Brewery 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 Heavitree Brewery 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 Heavitree Brewery i.e., Heavitree Brewery and Cellnex Telecom go up and down completely randomly.

Pair Corralation between Heavitree Brewery and Cellnex Telecom

Assuming the 90 days trading horizon Heavitree Brewery is expected to under-perform the Cellnex Telecom. In addition to that, Heavitree Brewery is 1.52 times more volatile than Cellnex Telecom SA. It trades about -0.07 of its total potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.04 per unit of volatility. If you would invest  3,653  in Cellnex Telecom SA on December 25, 2024 and sell it today you would lose (381.00) from holding Cellnex Telecom SA or give up 10.43% of portfolio value over 90 days.

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

Heavitree Brewery  vs.  Cellnex Telecom SA

Heavitree Brewery

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heavitree Brewery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Cellnex Telecom SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cellnex Telecom SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cellnex Telecom may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Heavitree Brewery and Cellnex Telecom

The main advantage of trading using opposite Heavitree Brewery and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heavitree Brewery 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 Heavitree Brewery 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.