Correlation Between Telus Corp and Dexterra
Can any of the company-specific risk be diversified away by investing in both Telus Corp and Dexterra 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 Dexterra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telus Corp and Dexterra Group, you can compare the effects of market volatilities on Telus Corp and Dexterra 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 Dexterra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telus Corp and Dexterra.
Diversification Opportunities for Telus Corp and Dexterra
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telus and Dexterra is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Telus Corp and Dexterra Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexterra Group 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 Dexterra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexterra Group has no effect on the direction of Telus Corp i.e., Telus Corp and Dexterra go up and down completely randomly.
Pair Corralation between Telus Corp and Dexterra
Given the investment horizon of 90 days Telus Corp is expected to under-perform the Dexterra. But the stock apears to be less risky and, when comparing its historical volatility, Telus Corp is 1.51 times less risky than Dexterra. The stock trades about -0.01 of its potential returns per unit of risk. The Dexterra Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 512.00 in Dexterra Group on November 8, 2024 and sell it today you would earn a total of 292.00 from holding Dexterra Group or generate 57.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telus Corp vs. Dexterra Group
Performance |
| Timeline |
| Telus Corp |
| Dexterra Group |
Telus Corp and Dexterra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telus Corp and Dexterra
The main advantage of trading using opposite Telus Corp and Dexterra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telus Corp position performs unexpectedly, Dexterra 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 Dexterra will offset losses from the drop in Dexterra's long position.| Telus Corp vs. BCE Inc | Telus Corp vs. Fortis Inc | Telus Corp vs. Enbridge | Telus Corp vs. Toronto Dominion Bank |
| Dexterra vs. Doman Building Materials | Dexterra vs. Topaz Energy Corp | Dexterra vs. Bird Construction | Dexterra vs. Alaris Equity Partners |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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