Correlation Between Tubos Reunidos and Cellnex Telecom

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

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

Diversification Opportunities for Tubos Reunidos and Cellnex Telecom

0.65

Correlation Coefficient

Tubos Reunidos  Cellnex Telecom

Poor diversification

The 3 months correlation between Tubos and Cellnex is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tubos Reunidos SA 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 Tubos Reunidos 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 Tubos Reunidos SA 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 Tubos Reunidos i.e., Tubos Reunidos and Cellnex Telecom go up and down completely randomly.

Pair Corralation between Tubos Reunidos and Cellnex Telecom

Assuming the 90 days trading horizon Tubos Reunidos SA is expected to generate 1.96 times more return on investment than Cellnex Telecom. However, Tubos Reunidos is 1.96 times more volatile than Cellnex Telecom SA. It trades about 0.15 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about 0.08 per unit of risk. If you would invest  49.00  in Tubos Reunidos SA on December 30, 2024 and sell it today you would earn a total of  18.00  from holding Tubos Reunidos SA or generate 36.73% return on investment over 90 days.

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

Tubos Reunidos SA  vs.  Cellnex Telecom SA

Tubos Reunidos SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tubos Reunidos SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Tubos Reunidos exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Cellnex Telecom may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Tubos Reunidos and Cellnex Telecom

The main advantage of trading using opposite Tubos Reunidos and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tubos Reunidos 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 Tubos Reunidos SA 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.