Correlation Between Cellnex Telecom and ACS Actividades

Can any of the company-specific risk be diversified away by investing in both Cellnex Telecom and ACS Actividades 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 ACS Actividades 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 ACS Actividades de, you can compare the effects of market volatilities on Cellnex Telecom and ACS Actividades 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 ACS Actividades. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cellnex Telecom and ACS Actividades.

Diversification Opportunities for Cellnex Telecom and ACS Actividades

-0.3

Correlation Coefficient

Cellnex Telecom  ACS Actividades

Very good diversification

The 3 months correlation between Cellnex and ACS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and ACS Actividades de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACS Actividades de 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 ACS Actividades. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACS Actividades de has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and ACS Actividades go up and down completely randomly.

Pair Corralation between Cellnex Telecom and ACS Actividades

Assuming the 90 days trading horizon Cellnex Telecom SA is expected to under-perform the ACS Actividades. In addition to that, Cellnex Telecom is 1.25 times more volatile than ACS Actividades de. It trades about -0.08 of its total potential returns per unit of risk. ACS Actividades de is currently generating about 0.22 per unit of volatility. If you would invest  4,052  in ACS Actividades de on September 12, 2024 and sell it today you would earn a total of  722.00  from holding ACS Actividades de or generate 17.82% return on investment over 90 days.

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

Cellnex Telecom SA  vs.  ACS Actividades de

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 latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

ACS Actividades de

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ACS Actividades de are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ACS Actividades exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cellnex Telecom and ACS Actividades

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

The idea behind Cellnex Telecom SA and ACS Actividades de 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.