Correlation Between Teka Tecelagem and Telefnica
Can any of the company-specific risk be diversified away by investing in both Teka Tecelagem and Telefnica 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 Teka Tecelagem and Telefnica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teka Tecelagem Kuehnrich and Telefnica SA, you can compare the effects of market volatilities on Teka Tecelagem and Telefnica 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 Teka Tecelagem with a short position of Telefnica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teka Tecelagem and Telefnica.
Diversification Opportunities for Teka Tecelagem and Telefnica
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Teka and Telefnica is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Teka Tecelagem Kuehnrich and Telefnica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefnica SA and Teka Tecelagem 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 Teka Tecelagem Kuehnrich are associated (or correlated) with Telefnica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefnica SA has no effect on the direction of Teka Tecelagem i.e., Teka Tecelagem and Telefnica go up and down completely randomly.
Pair Corralation between Teka Tecelagem and Telefnica
Assuming the 90 days trading horizon Teka Tecelagem Kuehnrich is expected to generate 0.84 times more return on investment than Telefnica. However, Teka Tecelagem Kuehnrich is 1.2 times less risky than Telefnica. It trades about 0.22 of its potential returns per unit of risk. Telefnica SA is currently generating about -0.09 per unit of risk. If you would invest 3,300 in Teka Tecelagem Kuehnrich on November 4, 2024 and sell it today you would earn a total of 350.00 from holding Teka Tecelagem Kuehnrich or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teka Tecelagem Kuehnrich vs. Telefnica SA
Performance |
| Timeline |
| Teka Tecelagem Kuehnrich |
| Telefnica SA |
Teka Tecelagem and Telefnica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teka Tecelagem and Telefnica
The main advantage of trading using opposite Teka Tecelagem and Telefnica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teka Tecelagem position performs unexpectedly, Telefnica 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 Telefnica will offset losses from the drop in Telefnica's long position.| Teka Tecelagem vs. Walmart | Teka Tecelagem vs. Amazon Inc | Teka Tecelagem vs. Accenture plc | Teka Tecelagem vs. The Kroger Co |
| Telefnica vs. Melco Resorts Entertainment | Telefnica vs. KB Financial Group | Telefnica vs. Broadridge Financial Solutions, | Telefnica vs. Charter Communications |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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