Correlation Between Tele2 AB and Clas Ohlson
Can any of the company-specific risk be diversified away by investing in both Tele2 AB and Clas Ohlson 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 Tele2 AB and Clas Ohlson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tele2 AB and Clas Ohlson AB, you can compare the effects of market volatilities on Tele2 AB and Clas Ohlson 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 Tele2 AB with a short position of Clas Ohlson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tele2 AB and Clas Ohlson.
Diversification Opportunities for Tele2 AB and Clas Ohlson
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tele2 and Clas is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Tele2 AB and Clas Ohlson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clas Ohlson AB and Tele2 AB 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 Tele2 AB are associated (or correlated) with Clas Ohlson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clas Ohlson AB has no effect on the direction of Tele2 AB i.e., Tele2 AB and Clas Ohlson go up and down completely randomly.
Pair Corralation between Tele2 AB and Clas Ohlson
Assuming the 90 days trading horizon Tele2 AB is expected to under-perform the Clas Ohlson. But the stock apears to be less risky and, when comparing its historical volatility, Tele2 AB is 1.77 times less risky than Clas Ohlson. The stock trades about -0.04 of its potential returns per unit of risk. The Clas Ohlson AB is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 17,440 in Clas Ohlson AB on August 29, 2024 and sell it today you would earn a total of 2,260 from holding Clas Ohlson AB or generate 12.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tele2 AB vs. Clas Ohlson AB
Performance |
| Timeline |
| Tele2 AB |
| Clas Ohlson AB |
Tele2 AB and Clas Ohlson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tele2 AB and Clas Ohlson
The main advantage of trading using opposite Tele2 AB and Clas Ohlson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tele2 AB position performs unexpectedly, Clas Ohlson 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 Clas Ohlson will offset losses from the drop in Clas Ohlson's long position.| Tele2 AB vs. Telia Company AB | Tele2 AB vs. Skanska AB | Tele2 AB vs. AB Electrolux | Tele2 AB vs. Svenska Handelsbanken AB |
| Clas Ohlson vs. Volati AB | Clas Ohlson vs. Bredband2 i Skandinavien | Clas Ohlson vs. Instalco Intressenter AB | Clas Ohlson vs. Teqnion AB |
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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