Correlation Between Cellnex Telecom and Calculus VCT

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

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

Diversification Opportunities for Cellnex Telecom and Calculus VCT

0.59

Correlation Coefficient

Cellnex Telecom  Calculus VCT

Very weak diversification

The 3 months correlation between Cellnex and Calculus is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Calculus VCT plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calculus VCT plc and Cellnex Telecom 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 Cellnex Telecom SA are associated (or correlated) with Calculus VCT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calculus VCT plc has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Calculus VCT go up and down completely randomly.

Pair Corralation between Cellnex Telecom and Calculus VCT

Assuming the 90 days trading horizon Cellnex Telecom is expected to generate 10.36 times less return on investment than Calculus VCT. In addition to that, Cellnex Telecom is 1.02 times more volatile than Calculus VCT plc. It trades about 0.0 of its total potential returns per unit of risk. Calculus VCT plc is currently generating about 0.02 per unit of volatility. If you would invest  4,767  in Calculus VCT plc on September 26, 2024 and sell it today you would earn a total of  333.00  from holding Calculus VCT plc or generate 6.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Cellnex Telecom SA  vs.  Calculus VCT plc

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Calculus VCT plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calculus VCT plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Cellnex Telecom and Calculus VCT

The main advantage of trading using opposite Cellnex Telecom and Calculus VCT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cellnex Telecom position performs unexpectedly, Calculus VCT 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 Calculus VCT will offset losses from the drop in Calculus VCT's long position.

The idea behind Cellnex Telecom SA and Calculus VCT plc 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.