Correlation Between Telefonaktiebolaget and Crunchfish
Can any of the company-specific risk be diversified away by investing in both Telefonaktiebolaget and Crunchfish 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 Crunchfish 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 Crunchfish AB, you can compare the effects of market volatilities on Telefonaktiebolaget and Crunchfish 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 Crunchfish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonaktiebolaget and Crunchfish.
Diversification Opportunities for Telefonaktiebolaget and Crunchfish
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telefonaktiebolaget and Crunchfish is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Telefonaktiebolaget LM Ericsso and Crunchfish AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crunchfish AB 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 Crunchfish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crunchfish AB has no effect on the direction of Telefonaktiebolaget i.e., Telefonaktiebolaget and Crunchfish go up and down completely randomly.
Pair Corralation between Telefonaktiebolaget and Crunchfish
Assuming the 90 days trading horizon Telefonaktiebolaget LM Ericsson is expected to under-perform the Crunchfish. But the stock apears to be less risky and, when comparing its historical volatility, Telefonaktiebolaget LM Ericsson is 8.03 times less risky than Crunchfish. The stock trades about -0.12 of its potential returns per unit of risk. The Crunchfish AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 81.00 in Crunchfish AB on November 27, 2024 and sell it today you would earn a total of 4.00 from holding Crunchfish AB or generate 4.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telefonaktiebolaget LM Ericsso vs. Crunchfish AB
Performance |
| Timeline |
| Telefonaktiebolaget |
| Crunchfish AB |
Telefonaktiebolaget and Crunchfish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonaktiebolaget and Crunchfish
The main advantage of trading using opposite Telefonaktiebolaget and Crunchfish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonaktiebolaget position performs unexpectedly, Crunchfish 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 Crunchfish will offset losses from the drop in Crunchfish's long position.| Telefonaktiebolaget vs. Telefonaktiebolaget LM Ericsson | Telefonaktiebolaget vs. AB Volvo | Telefonaktiebolaget vs. Investor AB ser | Telefonaktiebolaget vs. Industrivarden AB ser |
| Crunchfish vs. Bambuser AB | Crunchfish vs. Maha Energy AB | Crunchfish vs. Cantargia AB | Crunchfish vs. Minesto AB |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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