Correlation Between Telenor ASA and Nykode Therapeutics
Can any of the company-specific risk be diversified away by investing in both Telenor ASA and Nykode Therapeutics 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 Nykode Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telenor ASA and Nykode Therapeutics ASA, you can compare the effects of market volatilities on Telenor ASA and Nykode Therapeutics 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 Nykode Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and Nykode Therapeutics.
Diversification Opportunities for Telenor ASA and Nykode Therapeutics
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telenor and Nykode is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA and Nykode Therapeutics ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nykode Therapeutics ASA 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 Nykode Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nykode Therapeutics ASA has no effect on the direction of Telenor ASA i.e., Telenor ASA and Nykode Therapeutics go up and down completely randomly.
Pair Corralation between Telenor ASA and Nykode Therapeutics
Assuming the 90 days trading horizon Telenor ASA is expected to generate 0.24 times more return on investment than Nykode Therapeutics. However, Telenor ASA is 4.12 times less risky than Nykode Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Nykode Therapeutics ASA is currently generating about -0.07 per unit of risk. If you would invest 10,804 in Telenor ASA on November 27, 2024 and sell it today you would earn a total of 3,446 from holding Telenor ASA or generate 31.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telenor ASA vs. Nykode Therapeutics ASA
Performance |
| Timeline |
| Telenor ASA |
| Nykode Therapeutics ASA |
Telenor ASA and Nykode Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and Nykode Therapeutics
The main advantage of trading using opposite Telenor ASA and Nykode Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, Nykode Therapeutics 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 Nykode Therapeutics will offset losses from the drop in Nykode Therapeutics' long position.| Telenor ASA vs. Orkla ASA | Telenor ASA vs. DnB ASA | Telenor ASA vs. Yara International ASA | Telenor ASA vs. Storebrand ASA |
| Nykode Therapeutics vs. Golden Energy Offshore | Nykode Therapeutics vs. Nidaros Sparebank | Nykode Therapeutics vs. BW Offshore | Nykode Therapeutics vs. Morrow Bank 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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