Correlation Between Telenor ASA and Goodtech
Can any of the company-specific risk be diversified away by investing in both Telenor ASA and Goodtech 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 Telenor ASA and Goodtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telenor ASA and Goodtech, you can compare the effects of market volatilities on Telenor ASA and Goodtech 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 Telenor ASA with a short position of Goodtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and Goodtech.
Diversification Opportunities for Telenor ASA and Goodtech
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telenor and Goodtech is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA and Goodtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodtech and Telenor ASA 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 Telenor ASA are associated (or correlated) with Goodtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodtech has no effect on the direction of Telenor ASA i.e., Telenor ASA and Goodtech go up and down completely randomly.
Pair Corralation between Telenor ASA and Goodtech
Assuming the 90 days trading horizon Telenor ASA is expected to generate 0.99 times more return on investment than Goodtech. However, Telenor ASA is 1.02 times less risky than Goodtech. It trades about 0.02 of its potential returns per unit of risk. Goodtech is currently generating about -0.3 per unit of risk. If you would invest 13,110 in Telenor ASA on August 28, 2024 and sell it today you would earn a total of 70.00 from holding Telenor ASA or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Telenor ASA vs. Goodtech
Performance |
| Timeline |
| Telenor ASA |
| Goodtech |
Telenor ASA and Goodtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and Goodtech
The main advantage of trading using opposite Telenor ASA and Goodtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, Goodtech 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 Goodtech will offset losses from the drop in Goodtech's long position.| Telenor ASA vs. Orkla ASA | Telenor ASA vs. DnB ASA | Telenor ASA vs. Yara International ASA | Telenor ASA vs. Storebrand ASA |
| Goodtech vs. Eidesvik Offshore ASA | Goodtech vs. Kitron ASA | Goodtech vs. Havila Shipping ASA | Goodtech vs. Elkem ASA |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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