Correlation Between Team Internet and Cellnex Telecom

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

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

Diversification Opportunities for Team Internet and Cellnex Telecom

-0.44

Correlation Coefficient

Team Internet  Cellnex Telecom

Very good diversification

The 3 months correlation between Team and Cellnex is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Team Internet Group 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 Team Internet 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 Team Internet Group 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 Team Internet i.e., Team Internet and Cellnex Telecom go up and down completely randomly.

Pair Corralation between Team Internet and Cellnex Telecom

Assuming the 90 days trading horizon Team Internet Group is expected to under-perform the Cellnex Telecom. In addition to that, Team Internet is 1.78 times more volatile than Cellnex Telecom SA. It trades about -0.01 of its total potential returns per unit of risk. Cellnex Telecom SA is currently generating about 0.0 per unit of volatility. If you would invest  3,426  in Cellnex Telecom SA on November 21, 2024 and sell it today you would lose (301.00) from holding Cellnex Telecom SA or give up 8.79% of portfolio value over 90 days.

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

Team Internet Group  vs.  Cellnex Telecom SA

Team Internet Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Team Internet Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Team Internet exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cellnex Telecom SA

Risk-Adjusted Performance

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 comparatively stable basic indicators, Cellnex Telecom is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Team Internet and Cellnex Telecom

The main advantage of trading using opposite Team Internet and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Team Internet 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 Team Internet Group 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.