Correlation Between Telenor ASA and KT
Can any of the company-specific risk be diversified away by investing in both Telenor ASA and KT 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 KT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telenor ASA and KT Corporation, you can compare the effects of market volatilities on Telenor ASA and KT 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 KT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and KT.
Diversification Opportunities for Telenor ASA and KT
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telenor and KT is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT 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 KT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Corporation has no effect on the direction of Telenor ASA i.e., Telenor ASA and KT go up and down completely randomly.
Pair Corralation between Telenor ASA and KT
Assuming the 90 days horizon Telenor ASA is expected to generate 1.64 times less return on investment than KT. In addition to that, Telenor ASA is 1.95 times more volatile than KT Corporation. It trades about 0.03 of its total potential returns per unit of risk. KT Corporation is currently generating about 0.1 per unit of volatility. If you would invest 1,027 in KT Corporation on August 28, 2024 and sell it today you would earn a total of 669.00 from holding KT Corporation or generate 65.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.17% |
| Values | Daily Returns |
Telenor ASA vs. KT Corp.
Performance |
| Timeline |
| Telenor ASA |
| KT Corporation |
Telenor ASA and KT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and KT
The main advantage of trading using opposite Telenor ASA and KT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, KT 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 KT will offset losses from the drop in KT's long position.| Telenor ASA vs. Orange SA ADR | Telenor ASA vs. ATT Inc | Telenor ASA vs. Verizon Communications | Telenor ASA vs. MTN Group Ltd |
| KT vs. Liberty Broadband Srs | KT vs. Ribbon Communications | KT vs. Liberty Broadband Srs | KT vs. Shenandoah Telecommunications Co |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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