Correlation Between Telenor ASA and Koninklijke KPN
Can any of the company-specific risk be diversified away by investing in both Telenor ASA and Koninklijke KPN 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 Koninklijke KPN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telenor ASA ADR and Koninklijke KPN NV, you can compare the effects of market volatilities on Telenor ASA and Koninklijke KPN 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 Koninklijke KPN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and Koninklijke KPN.
Diversification Opportunities for Telenor ASA and Koninklijke KPN
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telenor and Koninklijke is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA ADR and Koninklijke KPN NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke KPN NV 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 ADR are associated (or correlated) with Koninklijke KPN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke KPN NV has no effect on the direction of Telenor ASA i.e., Telenor ASA and Koninklijke KPN go up and down completely randomly.
Pair Corralation between Telenor ASA and Koninklijke KPN
If you would invest 1,189 in Telenor ASA ADR on August 29, 2024 and sell it today you would lose (1.00) from holding Telenor ASA ADR or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Telenor ASA ADR vs. Koninklijke KPN NV
Performance |
| Timeline |
| Telenor ASA ADR |
| Koninklijke KPN NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Telenor ASA and Koninklijke KPN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and Koninklijke KPN
The main advantage of trading using opposite Telenor ASA and Koninklijke KPN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, Koninklijke KPN 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 Koninklijke KPN will offset losses from the drop in Koninklijke KPN's long position.| Telenor ASA vs. HUMANA INC | Telenor ASA vs. SCOR PK | Telenor ASA vs. Aquagold International | Telenor ASA vs. Barloworld Ltd ADR |
| Koninklijke KPN vs. Pegasus Tel | Koninklijke KPN vs. SwissCom AG | Koninklijke KPN vs. Hellenic Telecommunications Org | Koninklijke KPN vs. KonaTel |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |