Correlation Between Cellnex Telecom and ArcelorMittal

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

Diversification Opportunities for Cellnex Telecom and ArcelorMittal

-0.58

Correlation Coefficient

Cellnex Telecom  ArcelorMittal

Excellent diversification

The 3 months correlation between Cellnex and ArcelorMittal is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and ArcelorMittal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and ArcelorMittal go up and down completely randomly.

Pair Corralation between Cellnex Telecom and ArcelorMittal

Assuming the 90 days trading horizon Cellnex Telecom SA is expected to under-perform the ArcelorMittal. But the stock apears to be less risky and, when comparing its historical volatility, Cellnex Telecom SA is 1.62 times less risky than ArcelorMittal. The stock trades about -0.07 of its potential returns per unit of risk. The ArcelorMittal SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,532  in ArcelorMittal SA on April 24, 2025 and sell it today you would earn a total of  380.00  from holding ArcelorMittal SA or generate 15.01% return on investment over 90 days.

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

Cellnex Telecom SA  vs.  ArcelorMittal SA

Cellnex Telecom SA

Risk-Adjusted Performance

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 rather sound fundamental indicators, Cellnex Telecom is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

ArcelorMittal SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ArcelorMittal SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ArcelorMittal exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cellnex Telecom and ArcelorMittal

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

The idea behind Cellnex Telecom SA and ArcelorMittal 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.