Correlation Between TELE2 AB and Advanced Info
Can any of the company-specific risk be diversified away by investing in both TELE2 AB and Advanced Info 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 TELE2 AB and Advanced Info into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TELE2 AB UNSPADR12 and Advanced Info Service, you can compare the effects of market volatilities on TELE2 AB and Advanced Info 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 TELE2 AB with a short position of Advanced Info. Check out your portfolio center. Please also check ongoing floating volatility patterns of TELE2 AB and Advanced Info.
Diversification Opportunities for TELE2 AB and Advanced Info
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between TELE2 and Advanced is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding TELE2 AB UNSPADR12 and Advanced Info Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Info Service and TELE2 AB 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 TELE2 AB UNSPADR12 are associated (or correlated) with Advanced Info. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Info Service has no effect on the direction of TELE2 AB i.e., TELE2 AB and Advanced Info go up and down completely randomly.
Pair Corralation between TELE2 AB and Advanced Info
Assuming the 90 days horizon TELE2 AB is expected to generate 70.38 times less return on investment than Advanced Info. But when comparing it to its historical volatility, TELE2 AB UNSPADR12 is 1.62 times less risky than Advanced Info. It trades about 0.01 of its potential returns per unit of risk. Advanced Info Service is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 725.00 in Advanced Info Service on August 28, 2024 and sell it today you would earn a total of 60.00 from holding Advanced Info Service or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TELE2 AB UNSPADR12 vs. Advanced Info Service
Performance |
| Timeline |
| TELE2 AB UNSPADR12 |
| Advanced Info Service |
TELE2 AB and Advanced Info Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TELE2 AB and Advanced Info
The main advantage of trading using opposite TELE2 AB and Advanced Info positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TELE2 AB position performs unexpectedly, Advanced Info 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 Advanced Info will offset losses from the drop in Advanced Info's long position.| TELE2 AB vs. ATRESMEDIA | TELE2 AB vs. Jacquet Metal Service | TELE2 AB vs. PARKEN Sport Entertainment | TELE2 AB vs. Perseus Mining 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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