Correlation Between Telia Company and SSAB AB
Can any of the company-specific risk be diversified away by investing in both Telia Company and SSAB AB 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 SSAB AB 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 SSAB AB ser, you can compare the effects of market volatilities on Telia Company and SSAB AB 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 SSAB AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and SSAB AB.
Diversification Opportunities for Telia Company and SSAB AB
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Telia and SSAB is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and SSAB AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSAB AB ser 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 SSAB AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSAB AB ser has no effect on the direction of Telia Company i.e., Telia Company and SSAB AB go up and down completely randomly.
Pair Corralation between Telia Company and SSAB AB
Assuming the 90 days trading horizon Telia Company is expected to generate 3.73 times less return on investment than SSAB AB. But when comparing it to its historical volatility, Telia Company AB is 1.99 times less risky than SSAB AB. It trades about 0.14 of its potential returns per unit of risk. SSAB AB ser is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 406.00 in SSAB AB ser on November 3, 2024 and sell it today you would earn a total of 61.00 from holding SSAB AB ser or generate 15.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Telia Company AB vs. SSAB AB ser
Performance |
| Timeline |
| Telia Company |
| SSAB AB ser |
Telia Company and SSAB AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telia Company and SSAB AB
The main advantage of trading using opposite Telia Company and SSAB AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telia Company position performs unexpectedly, SSAB AB 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 SSAB AB will offset losses from the drop in SSAB AB'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 |
| SSAB AB vs. SSAB AB ser | SSAB AB vs. Outokumpu Oyj | SSAB AB vs. Metsa Board Oyj | SSAB AB 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |