Correlation Between NYSE Composite and Tele2 AB
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Tele2 AB 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 Tele2 AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Tele2 AB, you can compare the effects of market volatilities on NYSE Composite and Tele2 AB 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 Tele2 AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Tele2 AB.
Diversification Opportunities for NYSE Composite and Tele2 AB
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Tele2 is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Tele2 AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tele2 AB 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 Tele2 AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tele2 AB has no effect on the direction of NYSE Composite i.e., NYSE Composite and Tele2 AB go up and down completely randomly.
Pair Corralation between NYSE Composite and Tele2 AB
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.16 times less return on investment than Tele2 AB. But when comparing it to its historical volatility, NYSE Composite is 2.66 times less risky than Tele2 AB. It trades about 0.08 of its potential returns per unit of risk. Tele2 AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 394.00 in Tele2 AB on August 29, 2024 and sell it today you would earn a total of 105.00 from holding Tele2 AB or generate 26.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
NYSE Composite vs. Tele2 AB
Performance |
| Timeline |
NYSE Composite and Tele2 AB Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Tele2 AB
Pair trading matchups for Tele2 AB
Pair Trading with NYSE Composite and Tele2 AB
The main advantage of trading using opposite NYSE Composite and Tele2 AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Tele2 AB 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 Tele2 AB will offset losses from the drop in Tele2 AB's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Tele2 AB vs. Proximus NV ADR | Tele2 AB vs. Telstra Limited | Tele2 AB vs. Singapore Telecommunications Limited | Tele2 AB vs. Vodafone Group PLC |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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