Correlation Between Telefonaktiebolaget and Immersion
Can any of the company-specific risk be diversified away by investing in both Telefonaktiebolaget and Immersion 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 Immersion 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 Immersion, you can compare the effects of market volatilities on Telefonaktiebolaget and Immersion 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 Immersion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonaktiebolaget and Immersion.
Diversification Opportunities for Telefonaktiebolaget and Immersion
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telefonaktiebolaget and Immersion is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Telefonaktiebolaget LM Ericsso and Immersion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immersion 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 Immersion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immersion has no effect on the direction of Telefonaktiebolaget i.e., Telefonaktiebolaget and Immersion go up and down completely randomly.
Pair Corralation between Telefonaktiebolaget and Immersion
Given the investment horizon of 90 days Telefonaktiebolaget LM Ericsson is expected to generate 0.85 times more return on investment than Immersion. However, Telefonaktiebolaget LM Ericsson is 1.18 times less risky than Immersion. It trades about 0.1 of its potential returns per unit of risk. Immersion is currently generating about 0.05 per unit of risk. If you would invest 728.00 in Telefonaktiebolaget LM Ericsson on August 28, 2024 and sell it today you would earn a total of 88.00 from holding Telefonaktiebolaget LM Ericsson or generate 12.09% 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. Immersion
Performance |
| Timeline |
| Telefonaktiebolaget |
| Immersion |
Telefonaktiebolaget and Immersion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonaktiebolaget and Immersion
The main advantage of trading using opposite Telefonaktiebolaget and Immersion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonaktiebolaget position performs unexpectedly, Immersion 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 Immersion will offset losses from the drop in Immersion's long position.| Telefonaktiebolaget vs. Ichor Holdings | Telefonaktiebolaget vs. Fabrinet | Telefonaktiebolaget vs. Hello Group | Telefonaktiebolaget vs. Ultra Clean Holdings |
| Immersion vs. D Wave Quantum | Immersion vs. Rigetti Computing | Immersion vs. Cricut Inc | Immersion vs. Quantum Computing |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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