Correlation Between Telenor ASA and TietoEVRY Oyj
Can any of the company-specific risk be diversified away by investing in both Telenor ASA and TietoEVRY Oyj 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 TietoEVRY Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telenor ASA and TietoEVRY Oyj, you can compare the effects of market volatilities on Telenor ASA and TietoEVRY Oyj 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 TietoEVRY Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and TietoEVRY Oyj.
Diversification Opportunities for Telenor ASA and TietoEVRY Oyj
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telenor and TietoEVRY is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA and TietoEVRY Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TietoEVRY Oyj 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 TietoEVRY Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TietoEVRY Oyj has no effect on the direction of Telenor ASA i.e., Telenor ASA and TietoEVRY Oyj go up and down completely randomly.
Pair Corralation between Telenor ASA and TietoEVRY Oyj
Assuming the 90 days trading horizon Telenor ASA is expected to generate 1.23 times more return on investment than TietoEVRY Oyj. However, Telenor ASA is 1.23 times more volatile than TietoEVRY Oyj. It trades about -0.15 of its potential returns per unit of risk. TietoEVRY Oyj is currently generating about -0.23 per unit of risk. If you would invest 13,510 in Telenor ASA on September 1, 2024 and sell it today you would lose (510.00) from holding Telenor ASA or give up 3.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telenor ASA vs. TietoEVRY Oyj
Performance |
| Timeline |
| Telenor ASA |
| TietoEVRY Oyj |
Telenor ASA and TietoEVRY Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and TietoEVRY Oyj
The main advantage of trading using opposite Telenor ASA and TietoEVRY Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, TietoEVRY Oyj 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 TietoEVRY Oyj will offset losses from the drop in TietoEVRY Oyj's long position.| Telenor ASA vs. Orkla ASA | Telenor ASA vs. DnB ASA | Telenor ASA vs. Yara International ASA | Telenor ASA vs. Storebrand ASA |
| TietoEVRY Oyj vs. Xplora Technologies As | TietoEVRY Oyj vs. Jaeren Sparebank | TietoEVRY Oyj vs. Sparebanken Ost | TietoEVRY Oyj vs. Aasen Sparebank |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |