Correlation Between Telefonaktiebolaget and TELES Informationstech
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By analyzing existing cross correlation between Telefonaktiebolaget LM Ericsson and TELES Informationstechnologien AG, you can compare the effects of market volatilities on Telefonaktiebolaget and TELES Informationstech 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 TELES Informationstech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonaktiebolaget and TELES Informationstech.
Diversification Opportunities for Telefonaktiebolaget and TELES Informationstech
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telefonaktiebolaget and TELES is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Telefonaktiebolaget LM Ericsso and TELES Informationstechnologien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELES Informationstech 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 TELES Informationstech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELES Informationstech has no effect on the direction of Telefonaktiebolaget i.e., Telefonaktiebolaget and TELES Informationstech go up and down completely randomly.
Pair Corralation between Telefonaktiebolaget and TELES Informationstech
Assuming the 90 days trading horizon Telefonaktiebolaget LM Ericsson is expected to generate 0.46 times more return on investment than TELES Informationstech. However, Telefonaktiebolaget LM Ericsson is 2.16 times less risky than TELES Informationstech. It trades about 0.03 of its potential returns per unit of risk. TELES Informationstechnologien AG is currently generating about -0.12 per unit of risk. If you would invest 765.00 in Telefonaktiebolaget LM Ericsson on September 2, 2024 and sell it today you would earn a total of 5.00 from holding Telefonaktiebolaget LM Ericsson or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telefonaktiebolaget LM Ericsso vs. TELES Informationstechnologien
Performance |
| Timeline |
| Telefonaktiebolaget |
| TELES Informationstech |
Telefonaktiebolaget and TELES Informationstech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonaktiebolaget and TELES Informationstech
The main advantage of trading using opposite Telefonaktiebolaget and TELES Informationstech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonaktiebolaget position performs unexpectedly, TELES Informationstech 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 TELES Informationstech will offset losses from the drop in TELES Informationstech's long position.| Telefonaktiebolaget vs. Motorola Solutions | Telefonaktiebolaget vs. Nokia | Telefonaktiebolaget vs. ZTE Corporation | Telefonaktiebolaget vs. Hewlett Packard Enterprise |
| TELES Informationstech vs. Motorola Solutions | TELES Informationstech vs. Nokia | TELES Informationstech vs. ZTE Corporation | TELES Informationstech vs. Hewlett Packard Enterprise |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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