Correlation Between Telus Corp and Bce
Can any of the company-specific risk be diversified away by investing in both Telus Corp and Bce 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 Telus Corp and Bce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telus Corp and Bce Inc Pref, you can compare the effects of market volatilities on Telus Corp and Bce 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 Telus Corp with a short position of Bce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telus Corp and Bce.
Diversification Opportunities for Telus Corp and Bce
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telus and Bce is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Telus Corp and Bce Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bce Inc Pref and Telus Corp 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 Telus Corp are associated (or correlated) with Bce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bce Inc Pref has no effect on the direction of Telus Corp i.e., Telus Corp and Bce go up and down completely randomly.
Pair Corralation between Telus Corp and Bce
Given the investment horizon of 90 days Telus Corp is expected to generate 2.47 times less return on investment than Bce. In addition to that, Telus Corp is 1.58 times more volatile than Bce Inc Pref. It trades about 0.0 of its total potential returns per unit of risk. Bce Inc Pref is currently generating about 0.02 per unit of volatility. If you would invest 1,520 in Bce Inc Pref on September 14, 2024 and sell it today you would earn a total of 81.00 from holding Bce Inc Pref or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telus Corp vs. Bce Inc Pref
Performance |
| Timeline |
| Telus Corp |
| Bce Inc Pref |
Telus Corp and Bce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telus Corp and Bce
The main advantage of trading using opposite Telus Corp and Bce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telus Corp position performs unexpectedly, Bce 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 Bce will offset losses from the drop in Bce's long position.| Telus Corp vs. BCE Inc | Telus Corp vs. Fortis Inc | Telus Corp vs. Enbridge | Telus Corp vs. Toronto Dominion Bank |
| Bce vs. Partners Value Investments | Bce vs. Solid Impact Investments | Bce vs. Postmedia Network Canada | Bce vs. Boat Rocker Media |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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