Correlation Between BE Group and Telia Company
Can any of the company-specific risk be diversified away by investing in both BE Group and Telia Company 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 BE Group and Telia Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BE Group AB and Telia Company AB, you can compare the effects of market volatilities on BE Group and Telia Company 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 BE Group with a short position of Telia Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Group and Telia Company.
Diversification Opportunities for BE Group and Telia Company
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BEGR and Telia is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BE Group AB and Telia Company AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telia Company and BE Group 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 BE Group AB are associated (or correlated) with Telia Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telia Company has no effect on the direction of BE Group i.e., BE Group and Telia Company go up and down completely randomly.
Pair Corralation between BE Group and Telia Company
Assuming the 90 days trading horizon BE Group AB is expected to under-perform the Telia Company. In addition to that, BE Group is 1.22 times more volatile than Telia Company AB. It trades about -0.22 of its total potential returns per unit of risk. Telia Company AB is currently generating about -0.02 per unit of volatility. If you would invest 3,233 in Telia Company AB on August 30, 2024 and sell it today you would lose (40.00) from holding Telia Company AB or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Group AB vs. Telia Company AB
Performance |
| Timeline |
| BE Group AB |
| Telia Company |
BE Group and Telia Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Group and Telia Company
The main advantage of trading using opposite BE Group and Telia Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Group position performs unexpectedly, Telia Company 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 Telia Company will offset losses from the drop in Telia Company's long position.| BE Group vs. Troax Group AB | BE Group vs. NIBE Industrier AB | BE Group vs. Hexatronic Group AB | BE Group vs. Bufab Holding AB |
| Telia Company vs. Precise Biometrics AB | Telia Company vs. BE Group AB | Telia Company vs. Softronic AB | Telia Company vs. Bjorn Borg AB |
Check out your portfolio center.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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