Correlation Between MoneysupermarketCom and Cellnex Telecom

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

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

Diversification Opportunities for MoneysupermarketCom and Cellnex Telecom

0.77

Correlation Coefficient

MoneysupermarketCom  Cellnex Telecom

Poor diversification

The 3 months correlation between MoneysupermarketCom and Cellnex is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding MoneysupermarketCom Group 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 MoneysupermarketCom 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 MoneysupermarketCom Group 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 MoneysupermarketCom i.e., MoneysupermarketCom and Cellnex Telecom go up and down completely randomly.

Pair Corralation between MoneysupermarketCom and Cellnex Telecom

Assuming the 90 days trading horizon MoneysupermarketCom Group PLC is expected to generate 1.04 times more return on investment than Cellnex Telecom. However, MoneysupermarketCom is 1.04 times more volatile than Cellnex Telecom SA. It trades about -0.03 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.09 per unit of risk. If you would invest  20,320  in MoneysupermarketCom Group PLC on September 12, 2024 and sell it today you would lose (780.00) from holding MoneysupermarketCom Group PLC or give up 3.84% of portfolio value over 90 days.

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

MoneysupermarketCom Group PLC  vs.  Cellnex Telecom SA

MoneysupermarketCom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MoneysupermarketCom Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, MoneysupermarketCom is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private 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. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with MoneysupermarketCom and Cellnex Telecom

The main advantage of trading using opposite MoneysupermarketCom and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MoneysupermarketCom 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 MoneysupermarketCom Group 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.