Correlation Between TELE2 B and Apple
Can any of the company-specific risk be diversified away by investing in both TELE2 B and Apple 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 B and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TELE2 B and Apple Inc, you can compare the effects of market volatilities on TELE2 B and Apple 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 B with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of TELE2 B and Apple.
Diversification Opportunities for TELE2 B and Apple
Poor diversification
The 3 months correlation between TELE2 and Apple is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding TELE2 B and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and TELE2 B 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 B are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of TELE2 B i.e., TELE2 B and Apple go up and down completely randomly.
Pair Corralation between TELE2 B and Apple
Assuming the 90 days trading horizon TELE2 B is expected to generate 3.17 times more return on investment than Apple. However, TELE2 B is 3.17 times more volatile than Apple Inc. It trades about 0.1 of its potential returns per unit of risk. Apple Inc is currently generating about 0.13 per unit of risk. If you would invest 618.00 in TELE2 B on September 19, 2024 and sell it today you would earn a total of 359.00 from holding TELE2 B or generate 58.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
TELE2 B vs. Apple Inc
Performance |
| Timeline |
| TELE2 B |
| Apple Inc |
TELE2 B and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TELE2 B and Apple
The main advantage of trading using opposite TELE2 B and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TELE2 B position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| TELE2 B vs. DEVRY EDUCATION GRP | TELE2 B vs. American Public Education | TELE2 B vs. Corsair Gaming | TELE2 B vs. SEALED AIR |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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