Correlation Between Telefonica and Anterix
Can any of the company-specific risk be diversified away by investing in both Telefonica and Anterix 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 Telefonica and Anterix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonica SA ADR and Anterix, you can compare the effects of market volatilities on Telefonica and Anterix 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 Telefonica with a short position of Anterix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonica and Anterix.
Diversification Opportunities for Telefonica and Anterix
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Telefonica and Anterix is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Telefonica SA ADR and Anterix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anterix and Telefonica 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 Telefonica SA ADR are associated (or correlated) with Anterix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anterix has no effect on the direction of Telefonica i.e., Telefonica and Anterix go up and down completely randomly.
Pair Corralation between Telefonica and Anterix
Considering the 90-day investment horizon Telefonica SA ADR is expected to generate 0.36 times more return on investment than Anterix. However, Telefonica SA ADR is 2.82 times less risky than Anterix. It trades about 0.13 of its potential returns per unit of risk. Anterix is currently generating about -0.05 per unit of risk. If you would invest 400.00 in Telefonica SA ADR on November 9, 2024 and sell it today you would earn a total of 11.00 from holding Telefonica SA ADR or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telefonica SA ADR vs. Anterix
Performance |
| Timeline |
| Telefonica SA ADR |
| Anterix |
Telefonica and Anterix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonica and Anterix
The main advantage of trading using opposite Telefonica and Anterix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonica position performs unexpectedly, Anterix 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 Anterix will offset losses from the drop in Anterix's long position.| Telefonica vs. SK Telecom Co | Telefonica vs. America Movil SAB | Telefonica vs. KT Corporation | Telefonica vs. Telefonica Brasil SA |
| Anterix vs. Shenandoah Telecommunications Co | Anterix vs. Liberty Broadband Corp | Anterix vs. Ooma Inc | Anterix vs. IDT Corporation |
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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