Correlation Between Telia Company and Terveystalo
Can any of the company-specific risk be diversified away by investing in both Telia Company and Terveystalo 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 Terveystalo 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 Terveystalo Oy, you can compare the effects of market volatilities on Telia Company and Terveystalo 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 Terveystalo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and Terveystalo.
Diversification Opportunities for Telia Company and Terveystalo
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telia and Terveystalo is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and Terveystalo Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terveystalo Oy 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 Terveystalo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terveystalo Oy has no effect on the direction of Telia Company i.e., Telia Company and Terveystalo go up and down completely randomly.
Pair Corralation between Telia Company and Terveystalo
Assuming the 90 days trading horizon Telia Company is expected to generate 1.57 times less return on investment than Terveystalo. But when comparing it to its historical volatility, Telia Company AB is 1.31 times less risky than Terveystalo. It trades about 0.1 of its potential returns per unit of risk. Terveystalo Oy is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 743.00 in Terveystalo Oy on November 3, 2024 and sell it today you would earn a total of 431.00 from holding Terveystalo Oy or generate 58.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telia Company AB vs. Terveystalo Oy
Performance |
| Timeline |
| Telia Company |
| Terveystalo Oy |
Telia Company and Terveystalo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telia Company and Terveystalo
The main advantage of trading using opposite Telia Company and Terveystalo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telia Company position performs unexpectedly, Terveystalo 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 Terveystalo will offset losses from the drop in Terveystalo'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 |
| Terveystalo vs. Tokmanni Group Oyj | Terveystalo vs. Sampo Oyj A | Terveystalo vs. TietoEVRY Corp | Terveystalo 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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