Correlation Between Telia Company and Trainers House
Can any of the company-specific risk be diversified away by investing in both Telia Company and Trainers 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 Trainers 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 Trainers House Oyj, you can compare the effects of market volatilities on Telia Company and Trainers 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 Trainers House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and Trainers House.
Diversification Opportunities for Telia Company and Trainers House
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Telia and Trainers is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and Trainers House Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trainers House 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 Trainers House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trainers House Oyj has no effect on the direction of Telia Company i.e., Telia Company and Trainers House go up and down completely randomly.
Pair Corralation between Telia Company and Trainers House
Assuming the 90 days trading horizon Telia Company AB is expected to generate 0.36 times more return on investment than Trainers House. However, Telia Company AB is 2.8 times less risky than Trainers House. It trades about 0.03 of its potential returns per unit of risk. Trainers House Oyj is currently generating about -0.12 per unit of risk. If you would invest 275.00 in Telia Company AB on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Telia Company AB or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telia Company AB vs. Trainers House Oyj
Performance |
| Timeline |
| Telia Company |
| Trainers House Oyj |
Telia Company and Trainers House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telia Company and Trainers House
The main advantage of trading using opposite Telia Company and Trainers House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telia Company position performs unexpectedly, Trainers 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 Trainers House will offset losses from the drop in Trainers 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 |
| Trainers House vs. Admicom Oyj | Trainers House vs. Vincit Group Oyj | Trainers House vs. Harvia Oyj | Trainers House vs. Remedy Entertainment 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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