Correlation Between Telenor ASA and IDT
Can any of the company-specific risk be diversified away by investing in both Telenor ASA and IDT 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 Telenor ASA and IDT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telenor ASA and IDT Corporation, you can compare the effects of market volatilities on Telenor ASA and IDT 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 Telenor ASA with a short position of IDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and IDT.
Diversification Opportunities for Telenor ASA and IDT
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telenor and IDT is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA and IDT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDT Corporation and Telenor ASA 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 Telenor ASA are associated (or correlated) with IDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDT Corporation has no effect on the direction of Telenor ASA i.e., Telenor ASA and IDT go up and down completely randomly.
Pair Corralation between Telenor ASA and IDT
Assuming the 90 days horizon Telenor ASA is expected to under-perform the IDT. But the pink sheet apears to be less risky and, when comparing its historical volatility, Telenor ASA is 1.14 times less risky than IDT. The pink sheet trades about -0.05 of its potential returns per unit of risk. The IDT Corporation is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,672 in IDT Corporation on August 25, 2024 and sell it today you would earn a total of 447.00 from holding IDT Corporation or generate 9.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telenor ASA vs. IDT Corp.
Performance |
| Timeline |
| Telenor ASA |
| IDT Corporation |
Telenor ASA and IDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and IDT
The main advantage of trading using opposite Telenor ASA and IDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, IDT 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 IDT will offset losses from the drop in IDT's long position.| Telenor ASA vs. Vodafone Group PLC | Telenor ASA vs. KDDI Corp | Telenor ASA vs. Amrica Mvil, SAB | Telenor ASA vs. Singapore Telecommunications Limited |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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