Correlation Between Deutsche Telekom and Telenor ASA
Can any of the company-specific risk be diversified away by investing in both Deutsche Telekom and Telenor ASA 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 Deutsche Telekom and Telenor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Telekom AG and Telenor ASA ADR, you can compare the effects of market volatilities on Deutsche Telekom and Telenor ASA 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 Deutsche Telekom with a short position of Telenor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Telekom and Telenor ASA.
Diversification Opportunities for Deutsche Telekom and Telenor ASA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Deutsche and Telenor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Telekom AG and Telenor ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telenor ASA ADR and Deutsche Telekom 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 Deutsche Telekom AG are associated (or correlated) with Telenor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telenor ASA ADR has no effect on the direction of Deutsche Telekom i.e., Deutsche Telekom and Telenor ASA go up and down completely randomly.
Pair Corralation between Deutsche Telekom and Telenor ASA
If you would invest 1,009 in Telenor ASA ADR on December 16, 2024 and sell it today you would earn a total of 392.00 from holding Telenor ASA ADR or generate 38.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Deutsche Telekom AG vs. Telenor ASA ADR
Performance |
| Timeline |
| Deutsche Telekom |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Telenor ASA ADR |
Deutsche Telekom and Telenor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Telekom and Telenor ASA
The main advantage of trading using opposite Deutsche Telekom and Telenor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Telekom position performs unexpectedly, Telenor ASA 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 Telenor ASA will offset losses from the drop in Telenor ASA's long position.| Deutsche Telekom vs. KDDI Corp PK | ||
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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