Correlation Between KDDI Corp and Telenor ASA
Can any of the company-specific risk be diversified away by investing in both KDDI Corp and Telenor ASA 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 KDDI Corp and Telenor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KDDI Corp and Telenor ASA, you can compare the effects of market volatilities on KDDI Corp and Telenor ASA 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 KDDI Corp with a short position of Telenor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of KDDI Corp and Telenor ASA.
Diversification Opportunities for KDDI Corp and Telenor ASA
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KDDI and Telenor is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding KDDI Corp and Telenor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telenor ASA and KDDI Corp 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 KDDI Corp are associated (or correlated) with Telenor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telenor ASA has no effect on the direction of KDDI Corp i.e., KDDI Corp and Telenor ASA go up and down completely randomly.
Pair Corralation between KDDI Corp and Telenor ASA
Assuming the 90 days horizon KDDI Corp is expected to under-perform the Telenor ASA. In addition to that, KDDI Corp is 1.51 times more volatile than Telenor ASA. It trades about -0.1 of its total potential returns per unit of risk. Telenor ASA is currently generating about -0.05 per unit of volatility. If you would invest 1,190 in Telenor ASA on August 25, 2024 and sell it today you would lose (24.00) from holding Telenor ASA or give up 2.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KDDI Corp vs. Telenor ASA
Performance |
| Timeline |
| KDDI Corp |
| Telenor ASA |
KDDI Corp and Telenor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KDDI Corp and Telenor ASA
The main advantage of trading using opposite KDDI Corp and Telenor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KDDI Corp position performs unexpectedly, Telenor ASA 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 Telenor ASA will offset losses from the drop in Telenor ASA's long position.| KDDI Corp vs. Telefnica SA | KDDI Corp vs. Turk Telekomunikasyon AS | KDDI Corp vs. Orange SA | KDDI Corp vs. Nippon Telegraph Telephone |
| Telenor ASA vs. Vodafone Group PLC | Telenor ASA vs. KDDI Corp | Telenor ASA vs. Amrica Mvil, SAB | Telenor ASA vs. Singapore Telecommunications Limited |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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