Correlation Between NYSE Composite and Telenor ASA
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Telenor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Telenor ASA, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Telenor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Telenor ASA.
Diversification Opportunities for NYSE Composite and Telenor ASA
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Telenor is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Telenor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telenor ASA and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Telenor ASA go up and down completely randomly.
Pair Corralation between NYSE Composite and Telenor ASA
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.39 times more return on investment than Telenor ASA. However, NYSE Composite is 2.54 times less risky than Telenor ASA. It trades about 0.23 of its potential returns per unit of risk. Telenor ASA is currently generating about -0.04 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 66,978 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NYSE Composite vs. Telenor ASA
Performance |
| Timeline |
NYSE Composite and Telenor ASA Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Telenor ASA
Pair trading matchups for Telenor ASA
Pair Trading with NYSE Composite and Telenor ASA
The main advantage of trading using opposite NYSE Composite and Telenor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Telenor ASA vs. Orange SA ADR | Telenor ASA vs. ATT Inc | Telenor ASA vs. Verizon Communications | Telenor ASA vs. MTN Group Ltd |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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