Correlation Between Telenor ASA and U S Cellular
Can any of the company-specific risk be diversified away by investing in both Telenor ASA and U S Cellular 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 U S Cellular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telenor ASA and United States Cellular, you can compare the effects of market volatilities on Telenor ASA and U S Cellular 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 U S Cellular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and U S Cellular.
Diversification Opportunities for Telenor ASA and U S Cellular
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Telenor and USM is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA and United States Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Cellular 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 U S Cellular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Cellular has no effect on the direction of Telenor ASA i.e., Telenor ASA and U S Cellular go up and down completely randomly.
Pair Corralation between Telenor ASA and U S Cellular
Assuming the 90 days horizon Telenor ASA is expected to generate 1.07 times more return on investment than U S Cellular. However, Telenor ASA is 1.07 times more volatile than United States Cellular. It trades about 0.39 of its potential returns per unit of risk. United States Cellular is currently generating about 0.02 per unit of risk. If you would invest 1,081 in Telenor ASA on November 3, 2024 and sell it today you would earn a total of 115.00 from holding Telenor ASA or generate 10.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telenor ASA vs. United States Cellular
Performance |
| Timeline |
| Telenor ASA |
| United States Cellular |
Telenor ASA and U S Cellular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and U S Cellular
The main advantage of trading using opposite Telenor ASA and U S Cellular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, U S Cellular 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 U S Cellular will offset losses from the drop in U S Cellular's long position.| Telenor ASA vs. ATT Inc | Telenor ASA vs. Verizon Communications | Telenor ASA vs. MTN Group Ltd | Telenor ASA vs. XL Axiata Tbk |
| U S Cellular vs. Telephone and Data | U S Cellular vs. Vodafone Group PLC | U S Cellular vs. Lumen Technologies | U S Cellular vs. Altice USA |
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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