Correlation Between Cellnex Telecom and Realia

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

Diversification Opportunities for Cellnex Telecom and Realia

-0.29

Correlation Coefficient

Cellnex Telecom  Realia

Very good diversification

The 3 months correlation between Cellnex and Realia is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Realia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realia 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 Realia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realia has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Realia go up and down completely randomly.

Pair Corralation between Cellnex Telecom and Realia

Assuming the 90 days trading horizon Cellnex Telecom SA is expected to under-perform the Realia. But the stock apears to be less risky and, when comparing its historical volatility, Cellnex Telecom SA is 1.35 times less risky than Realia. The stock trades about -0.1 of its potential returns per unit of risk. The Realia is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  91.00  in Realia on April 22, 2025 and sell it today you would earn a total of  3.00  from holding Realia or generate 3.3% 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.  Realia

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 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.

Realia

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Realia are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Realia is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cellnex Telecom and Realia

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

The idea behind Cellnex Telecom SA and Realia 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.