Correlation Between Telia Company and Investors House
Can any of the company-specific risk be diversified away by investing in both Telia Company and Investors House 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 Telia Company and Investors House into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telia Company AB and Investors House, you can compare the effects of market volatilities on Telia Company and Investors House 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 Telia Company with a short position of Investors House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and Investors House.
Diversification Opportunities for Telia Company and Investors House
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telia and Investors is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and Investors House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investors House and Telia Company 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 Telia Company AB are associated (or correlated) with Investors House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investors House has no effect on the direction of Telia Company i.e., Telia Company and Investors House go up and down completely randomly.
Pair Corralation between Telia Company and Investors House
Assuming the 90 days trading horizon Telia Company AB is expected to generate 0.81 times more return on investment than Investors House. However, Telia Company AB is 1.24 times less risky than Investors House. It trades about 0.12 of its potential returns per unit of risk. Investors House is currently generating about -0.06 per unit of risk. If you would invest 269.00 in Telia Company AB on August 31, 2024 and sell it today you would earn a total of 9.00 from holding Telia Company AB or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telia Company AB vs. Investors House
Performance |
| Timeline |
| Telia Company |
| Investors House |
Telia Company and Investors House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telia Company and Investors House
The main advantage of trading using opposite Telia Company and Investors House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telia Company position performs unexpectedly, Investors House 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 Investors House will offset losses from the drop in Investors House's long position.| Telia Company vs. Nordea Bank Abp | Telia Company vs. Sampo Oyj A | Telia Company vs. Fortum Oyj | Telia Company vs. Wartsila Oyj Abp |
| Investors House vs. Taaleri Oyj | Investors House vs. CapMan Oyj B | Investors House vs. Evli Pankki Oyj | Investors House vs. Citycon Oyj |
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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