Correlation Between Telia Company and Robit Oyj
Can any of the company-specific risk be diversified away by investing in both Telia Company and Robit 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 Telia Company and Robit Oyj 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 Robit Oyj, you can compare the effects of market volatilities on Telia Company and Robit 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 Telia Company with a short position of Robit Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and Robit Oyj.
Diversification Opportunities for Telia Company and Robit Oyj
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telia and Robit is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and Robit Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robit Oyj 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 Robit Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robit Oyj has no effect on the direction of Telia Company i.e., Telia Company and Robit Oyj go up and down completely randomly.
Pair Corralation between Telia Company and Robit Oyj
Assuming the 90 days trading horizon Telia Company AB is expected to generate 0.98 times more return on investment than Robit Oyj. However, Telia Company AB is 1.02 times less risky than Robit Oyj. It trades about 0.01 of its potential returns per unit of risk. Robit Oyj is currently generating about -0.06 per unit of risk. If you would invest 276.00 in Telia Company AB on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Telia Company AB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telia Company AB vs. Robit Oyj
Performance |
| Timeline |
| Telia Company |
| Robit Oyj |
Telia Company and Robit Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telia Company and Robit Oyj
The main advantage of trading using opposite Telia Company and Robit Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telia Company position performs unexpectedly, Robit 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 Robit Oyj will offset losses from the drop in Robit Oyj'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 |
| Robit Oyj vs. Telefonaktiebolaget LM Ericsson | Robit Oyj vs. SSAB AB ser | Robit Oyj vs. SSAB AB ser | Robit Oyj vs. Telia Company 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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