Correlation Between Telus Corp and Network Media
Can any of the company-specific risk be diversified away by investing in both Telus Corp and Network Media 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 Network Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telus Corp and Network Media Group, you can compare the effects of market volatilities on Telus Corp and Network Media 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 Network Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telus Corp and Network Media.
Diversification Opportunities for Telus Corp and Network Media
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telus and Network is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Telus Corp and Network Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network Media 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 Network Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network Media Group has no effect on the direction of Telus Corp i.e., Telus Corp and Network Media go up and down completely randomly.
Pair Corralation between Telus Corp and Network Media
Given the investment horizon of 90 days Telus Corp is expected to generate 0.19 times more return on investment than Network Media. However, Telus Corp is 5.16 times less risky than Network Media. It trades about 0.01 of its potential returns per unit of risk. Network Media Group is currently generating about -0.16 per unit of risk. If you would invest 2,172 in Telus Corp on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Telus Corp or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telus Corp vs. Network Media Group
Performance |
| Timeline |
| Telus Corp |
| Network Media Group |
Telus Corp and Network Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telus Corp and Network Media
The main advantage of trading using opposite Telus Corp and Network Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telus Corp position performs unexpectedly, Network Media 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 Network Media will offset losses from the drop in Network Media's long position.| Telus Corp vs. BCE Inc | Telus Corp vs. Fortis Inc | Telus Corp vs. Enbridge | Telus Corp vs. Toronto Dominion Bank |
| Network Media vs. Telus Corp | Network Media vs. Toronto Dominion Bank | Network Media vs. TC Energy Corp | Network Media vs. Manulife Financial Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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