Correlation Between Mowi ASA and Telenor ASA
Can any of the company-specific risk be diversified away by investing in both Mowi ASA 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 Mowi ASA and Telenor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mowi ASA and Telenor ASA, you can compare the effects of market volatilities on Mowi ASA 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 Mowi ASA with a short position of Telenor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mowi ASA and Telenor ASA.
Diversification Opportunities for Mowi ASA and Telenor ASA
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mowi and Telenor is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mowi ASA and Telenor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telenor ASA and Mowi ASA 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 Mowi ASA 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 Mowi ASA i.e., Mowi ASA and Telenor ASA go up and down completely randomly.
Pair Corralation between Mowi ASA and Telenor ASA
Assuming the 90 days trading horizon Mowi ASA is expected to generate 1.02 times less return on investment than Telenor ASA. In addition to that, Mowi ASA is 1.26 times more volatile than Telenor ASA. It trades about 0.06 of its total potential returns per unit of risk. Telenor ASA is currently generating about 0.07 per unit of volatility. If you would invest 9,774 in Telenor ASA on November 2, 2024 and sell it today you would earn a total of 4,106 from holding Telenor ASA or generate 42.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mowi ASA vs. Telenor ASA
Performance |
| Timeline |
| Mowi ASA |
| Telenor ASA |
Mowi ASA and Telenor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mowi ASA and Telenor ASA
The main advantage of trading using opposite Mowi ASA and Telenor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mowi ASA 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.| Mowi ASA vs. SalMar ASA | Mowi ASA vs. Lery Seafood Group | Mowi ASA vs. Pf Bakkafrost | Mowi ASA vs. Grieg Seafood ASA |
| Telenor ASA vs. Orkla ASA | Telenor ASA vs. DnB ASA | Telenor ASA vs. Yara International ASA | Telenor ASA vs. Storebrand ASA |
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 CEOs Directory module to screen CEOs from public companies around the world.
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