Correlation Between Telefonaktiebolaget and Glaston Oyj
Can any of the company-specific risk be diversified away by investing in both Telefonaktiebolaget and Glaston Oyj 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 Glaston Oyj 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 Glaston Oyj Abp, you can compare the effects of market volatilities on Telefonaktiebolaget and Glaston Oyj 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 Glaston Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonaktiebolaget and Glaston Oyj.
Diversification Opportunities for Telefonaktiebolaget and Glaston Oyj
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telefonaktiebolaget and Glaston is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Telefonaktiebolaget LM Ericsso and Glaston Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glaston Oyj Abp 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 Glaston Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glaston Oyj Abp has no effect on the direction of Telefonaktiebolaget i.e., Telefonaktiebolaget and Glaston Oyj go up and down completely randomly.
Pair Corralation between Telefonaktiebolaget and Glaston Oyj
Assuming the 90 days trading horizon Telefonaktiebolaget LM Ericsson is expected to generate 1.11 times more return on investment than Glaston Oyj. However, Telefonaktiebolaget is 1.11 times more volatile than Glaston Oyj Abp. It trades about 0.16 of its potential returns per unit of risk. Glaston Oyj Abp is currently generating about -0.05 per unit of risk. If you would invest 567.00 in Telefonaktiebolaget LM Ericsson on September 1, 2024 and sell it today you would earn a total of 213.00 from holding Telefonaktiebolaget LM Ericsson or generate 37.57% 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. Glaston Oyj Abp
Performance |
| Timeline |
| Telefonaktiebolaget |
| Glaston Oyj Abp |
Telefonaktiebolaget and Glaston Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonaktiebolaget and Glaston Oyj
The main advantage of trading using opposite Telefonaktiebolaget and Glaston Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonaktiebolaget position performs unexpectedly, Glaston Oyj 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 Glaston Oyj will offset losses from the drop in Glaston Oyj's long position.| Telefonaktiebolaget vs. Telia Company AB | Telefonaktiebolaget vs. SSAB AB ser | Telefonaktiebolaget vs. Kesko Oyj | Telefonaktiebolaget vs. Stora Enso Oyj |
| Glaston Oyj vs. Bittium Oyj | Glaston Oyj vs. Tecnotree Oyj | Glaston Oyj vs. Exel Composites Oyj | Glaston Oyj vs. Tokmanni Group Oyj |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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