Correlation Between Cellnex Telecom and Coca Cola

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

Diversification Opportunities for Cellnex Telecom and Coca Cola

-0.2

Correlation Coefficient

Cellnex Telecom  Coca Cola

Good diversification

The 3 months correlation between Cellnex and Coca is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Coca Cola European Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola European 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola European has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Coca Cola go up and down completely randomly.

Pair Corralation between Cellnex Telecom and Coca Cola

Assuming the 90 days trading horizon Cellnex Telecom SA is expected to under-perform the Coca Cola. But the stock apears to be less risky and, when comparing its historical volatility, Cellnex Telecom SA is 1.49 times less risky than Coca Cola. The stock trades about -0.13 of its potential returns per unit of risk. The Coca Cola European Partners is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  7,890  in Coca Cola European Partners on May 20, 2025 and sell it today you would lose (100.00) from holding Coca Cola European Partners or give up 1.27% of portfolio value over 90 days.

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

Cellnex Telecom SA  vs.  Coca Cola European Partners

Cellnex Telecom SA

Risk-Adjusted Performance

Weakest

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.

Coca Cola European

Risk-Adjusted Performance

Weakest

Over the last 90 days Coca Cola European Partners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Coca Cola 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 Coca Cola

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

The idea behind Cellnex Telecom SA and Coca Cola European Partners 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.