Correlation Between AB Electrolux and Telia Company
Can any of the company-specific risk be diversified away by investing in both AB Electrolux 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 AB Electrolux and Telia Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Electrolux and Telia Company AB, you can compare the effects of market volatilities on AB Electrolux 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 AB Electrolux with a short position of Telia Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Electrolux and Telia Company.
Diversification Opportunities for AB Electrolux and Telia Company
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between ELUX-B and Telia is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding AB Electrolux and Telia Company AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telia Company and AB Electrolux 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 AB Electrolux 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 AB Electrolux i.e., AB Electrolux and Telia Company go up and down completely randomly.
Pair Corralation between AB Electrolux and Telia Company
Assuming the 90 days trading horizon AB Electrolux is expected to generate 1.32 times less return on investment than Telia Company. In addition to that, AB Electrolux is 1.77 times more volatile than Telia Company AB. It trades about 0.17 of its total potential returns per unit of risk. Telia Company AB is currently generating about 0.39 per unit of volatility. If you would invest 3,011 in Telia Company AB on November 9, 2024 and sell it today you would earn a total of 339.00 from holding Telia Company AB or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Electrolux vs. Telia Company AB
Performance |
| Timeline |
| AB Electrolux |
| Telia Company |
AB Electrolux and Telia Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Electrolux and Telia Company
The main advantage of trading using opposite AB Electrolux and Telia Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Electrolux 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.| AB Electrolux vs. AB SKF | AB Electrolux vs. Tele2 AB | AB Electrolux vs. Sandvik AB | AB Electrolux vs. Skanska AB |
| Telia Company vs. Tele2 AB | Telia Company vs. Swedbank AB | Telia Company vs. Svenska Handelsbanken AB | Telia Company vs. Nordea Bank Abp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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