Correlation Between Telenor ASA and Ultimovacs ASA
Can any of the company-specific risk be diversified away by investing in both Telenor ASA and Ultimovacs ASA 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 Ultimovacs ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telenor ASA and Ultimovacs ASA, you can compare the effects of market volatilities on Telenor ASA and Ultimovacs ASA 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 Ultimovacs ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and Ultimovacs ASA.
Diversification Opportunities for Telenor ASA and Ultimovacs ASA
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telenor and Ultimovacs is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA and Ultimovacs ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultimovacs 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 Ultimovacs ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultimovacs ASA has no effect on the direction of Telenor ASA i.e., Telenor ASA and Ultimovacs ASA go up and down completely randomly.
Pair Corralation between Telenor ASA and Ultimovacs ASA
Assuming the 90 days trading horizon Telenor ASA is expected to generate 2.86 times less return on investment than Ultimovacs ASA. But when comparing it to its historical volatility, Telenor ASA is 4.8 times less risky than Ultimovacs ASA. It trades about 0.4 of its potential returns per unit of risk. Ultimovacs ASA is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 216.00 in Ultimovacs ASA on November 27, 2024 and sell it today you would earn a total of 34.00 from holding Ultimovacs ASA or generate 15.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telenor ASA vs. Ultimovacs ASA
Performance |
| Timeline |
| Telenor ASA |
| Ultimovacs ASA |
Telenor ASA and Ultimovacs ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and Ultimovacs ASA
The main advantage of trading using opposite Telenor ASA and Ultimovacs ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, Ultimovacs ASA 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 Ultimovacs ASA will offset losses from the drop in Ultimovacs ASA's long position.| Telenor ASA vs. Orkla ASA | Telenor ASA vs. DnB ASA | Telenor ASA vs. Yara International ASA | Telenor ASA vs. Storebrand ASA |
| Ultimovacs ASA vs. Bergenbio ASA | Ultimovacs ASA vs. Nykode Therapeutics ASA | Ultimovacs ASA vs. PCI Biotech Holding |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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