Correlation Between Peab AB and Telia Company
Can any of the company-specific risk be diversified away by investing in both Peab AB and Telia Company 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 Peab AB and Telia Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peab AB and Telia Company AB, you can compare the effects of market volatilities on Peab AB and Telia Company 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 Peab AB with a short position of Telia Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peab AB and Telia Company.
Diversification Opportunities for Peab AB and Telia Company
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Peab and Telia is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Peab AB and Telia Company AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telia Company and Peab 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 Peab AB are associated (or correlated) with Telia Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telia Company has no effect on the direction of Peab AB i.e., Peab AB and Telia Company go up and down completely randomly.
Pair Corralation between Peab AB and Telia Company
Assuming the 90 days trading horizon Peab AB is expected to under-perform the Telia Company. But the stock apears to be less risky and, when comparing its historical volatility, Peab AB is 1.06 times less risky than Telia Company. The stock trades about 0.0 of its potential returns per unit of risk. The Telia Company AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,194 in Telia Company AB on August 30, 2024 and sell it today you would lose (1.00) from holding Telia Company AB or give up 0.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Peab AB vs. Telia Company AB
Performance |
Timeline |
Peab AB |
Telia Company |
Peab AB and Telia Company Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Peab AB and Telia Company
The main advantage of trading using opposite Peab AB and Telia Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peab AB position performs unexpectedly, Telia Company 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 Telia Company will offset losses from the drop in Telia Company's long position.Peab AB vs. Bio Works Technologies AB | Peab AB vs. Episurf Medical AB | Peab AB vs. OptiCept Technologies AB | Peab AB vs. SolTech Energy Sweden |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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