Correlation Between Telia Company and Viking Line
Can any of the company-specific risk be diversified away by investing in both Telia Company and Viking Line 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 Viking Line 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 Viking Line Abp, you can compare the effects of market volatilities on Telia Company and Viking Line 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 Viking Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and Viking Line.
Diversification Opportunities for Telia Company and Viking Line
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Telia and Viking is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and Viking Line Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Line Abp 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 Viking Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Line Abp has no effect on the direction of Telia Company i.e., Telia Company and Viking Line go up and down completely randomly.
Pair Corralation between Telia Company and Viking Line
Assuming the 90 days trading horizon Telia Company AB is expected to generate 0.98 times more return on investment than Viking Line. However, Telia Company AB is 1.02 times less risky than Viking Line. It trades about 0.02 of its potential returns per unit of risk. Viking Line Abp is currently generating about -0.03 per unit of risk. If you would invest 274.00 in Telia Company AB on August 28, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telia Company AB vs. Viking Line Abp
Performance |
| Timeline |
| Telia Company |
| Viking Line Abp |
Telia Company and Viking Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telia Company and Viking Line
The main advantage of trading using opposite Telia Company and Viking Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telia Company position performs unexpectedly, Viking Line 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 Viking Line will offset losses from the drop in Viking Line'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 |
| Viking Line vs. United Bankers Oyj | Viking Line vs. Detection Technology OY | Viking Line vs. HKFoods Oyj A | Viking Line vs. Nordea Bank Abp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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