Correlation Between Telefonaktiebolaget and Cable One
Can any of the company-specific risk be diversified away by investing in both Telefonaktiebolaget and Cable One 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 Telefonaktiebolaget and Cable One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonaktiebolaget LM Ericsson and Cable One, you can compare the effects of market volatilities on Telefonaktiebolaget and Cable One 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 Telefonaktiebolaget with a short position of Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonaktiebolaget and Cable One.
Diversification Opportunities for Telefonaktiebolaget and Cable One
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telefonaktiebolaget and Cable is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Telefonaktiebolaget LM Ericsso and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One and Telefonaktiebolaget 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 Telefonaktiebolaget LM Ericsson are associated (or correlated) with Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of Telefonaktiebolaget i.e., Telefonaktiebolaget and Cable One go up and down completely randomly.
Pair Corralation between Telefonaktiebolaget and Cable One
Assuming the 90 days trading horizon Telefonaktiebolaget is expected to generate 1.57 times less return on investment than Cable One. But when comparing it to its historical volatility, Telefonaktiebolaget LM Ericsson is 1.12 times less risky than Cable One. It trades about 0.08 of its potential returns per unit of risk. Cable One is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 981.00 in Cable One on October 26, 2024 and sell it today you would earn a total of 103.00 from holding Cable One or generate 10.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Telefonaktiebolaget LM Ericsso vs. Cable One
Performance |
| Timeline |
| Telefonaktiebolaget |
| Cable One |
Telefonaktiebolaget and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonaktiebolaget and Cable One
The main advantage of trading using opposite Telefonaktiebolaget and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonaktiebolaget position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| Telefonaktiebolaget vs. SK Telecom Co, | Telefonaktiebolaget vs. Check Point Software | Telefonaktiebolaget vs. G2D Investments | Telefonaktiebolaget vs. Agilent Technologies |
| Cable One vs. GX AI TECH | Cable One vs. Palantir Technologies | Cable One vs. United Natural Foods, | Cable One vs. Vulcan Materials |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |