Correlation Between Uniper SE and Cellnex Telecom

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

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

Diversification Opportunities for Uniper SE and Cellnex Telecom

0.8

Correlation Coefficient

Uniper SE  Cellnex Telecom

Very poor diversification

The 3 months correlation between Uniper and Cellnex is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE 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 Uniper SE 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 Uniper SE 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 Uniper SE i.e., Uniper SE and Cellnex Telecom go up and down completely randomly.

Pair Corralation between Uniper SE and Cellnex Telecom

Assuming the 90 days trading horizon Uniper SE is expected to generate 1.78 times more return on investment than Cellnex Telecom. However, Uniper SE is 1.78 times more volatile than Cellnex Telecom SA. It trades about -0.06 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about -0.17 per unit of risk. If you would invest  4,487  in Uniper SE on September 23, 2024 and sell it today you would lose (532.00) from holding Uniper SE or give up 11.86% of portfolio value over 90 days.

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

Uniper SE  vs.  Cellnex Telecom SA

Uniper SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uniper SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady 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.

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.

Pair Trading with Uniper SE and Cellnex Telecom

The main advantage of trading using opposite Uniper SE and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE 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 Uniper SE 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.