Correlation Between Telus Corp and Kelt Exploration
Can any of the company-specific risk be diversified away by investing in both Telus Corp and Kelt Exploration 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 Kelt Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telus Corp and Kelt Exploration, you can compare the effects of market volatilities on Telus Corp and Kelt Exploration 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 Kelt Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telus Corp and Kelt Exploration.
Diversification Opportunities for Telus Corp and Kelt Exploration
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telus and Kelt is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Telus Corp and Kelt Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelt Exploration 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 Kelt Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelt Exploration has no effect on the direction of Telus Corp i.e., Telus Corp and Kelt Exploration go up and down completely randomly.
Pair Corralation between Telus Corp and Kelt Exploration
Given the investment horizon of 90 days Telus Corp is expected to generate 0.59 times more return on investment than Kelt Exploration. However, Telus Corp is 1.7 times less risky than Kelt Exploration. It trades about 0.38 of its potential returns per unit of risk. Kelt Exploration is currently generating about -0.07 per unit of risk. If you would invest 1,936 in Telus Corp on November 3, 2024 and sell it today you would earn a total of 172.00 from holding Telus Corp or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Telus Corp vs. Kelt Exploration
Performance |
| Timeline |
| Telus Corp |
| Kelt Exploration |
Telus Corp and Kelt Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telus Corp and Kelt Exploration
The main advantage of trading using opposite Telus Corp and Kelt Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telus Corp position performs unexpectedly, Kelt Exploration 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 Kelt Exploration will offset losses from the drop in Kelt Exploration's long position.| Telus Corp vs. BCE Inc | Telus Corp vs. Fortis Inc | Telus Corp vs. Enbridge | Telus Corp vs. Toronto Dominion Bank |
| Kelt Exploration vs. NuVista Energy | Kelt Exploration vs. Advantage Oil Gas | Kelt Exploration vs. Birchcliff Energy | Kelt Exploration vs. Cardinal Energy |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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