Correlation Between Gaztransport and Cellnex Telecom

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

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

Diversification Opportunities for Gaztransport and Cellnex Telecom

-0.79

Correlation Coefficient

Gaztransport  Cellnex Telecom

Pay attention - limited upside

The 3 months correlation between Gaztransport and Cellnex is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz 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 Gaztransport 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 Gaztransport et Technigaz 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 Gaztransport i.e., Gaztransport and Cellnex Telecom go up and down completely randomly.

Pair Corralation between Gaztransport and Cellnex Telecom

Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 0.92 times more return on investment than Cellnex Telecom. However, Gaztransport et Technigaz is 1.09 times less risky than Cellnex Telecom. It trades about 0.1 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.05 per unit of risk. If you would invest  12,295  in Gaztransport et Technigaz on September 5, 2024 and sell it today you would earn a total of  1,045  from holding Gaztransport et Technigaz or generate 8.5% return on investment over 90 days.

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

Gaztransport et Technigaz  vs.  Cellnex Telecom SA

Gaztransport et Technigaz

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Gaztransport may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 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 Gaztransport and Cellnex Telecom

The main advantage of trading using opposite Gaztransport and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport 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 Gaztransport et Technigaz 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.