Correlation Between Telenor ASA and Orange SA
Can any of the company-specific risk be diversified away by investing in both Telenor ASA and Orange SA 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 Orange SA 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 Orange SA ADR, you can compare the effects of market volatilities on Telenor ASA and Orange SA 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 Orange SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and Orange SA.
Diversification Opportunities for Telenor ASA and Orange SA
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telenor and Orange is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA ADR and Orange SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange SA ADR 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 Orange SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange SA ADR has no effect on the direction of Telenor ASA i.e., Telenor ASA and Orange SA go up and down completely randomly.
Pair Corralation between Telenor ASA and Orange SA
If you would invest 1,114 in Telenor ASA ADR on November 1, 2024 and sell it today you would earn a total of 116.00 from holding Telenor ASA ADR or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Telenor ASA ADR vs. Orange SA ADR
Performance |
| Timeline |
| Telenor ASA ADR |
| Orange SA ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Telenor ASA and Orange SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and Orange SA
The main advantage of trading using opposite Telenor ASA and Orange SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, Orange SA 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 Orange SA will offset losses from the drop in Orange SA's long position.| Telenor ASA vs. PCCW Limited | Telenor ASA vs. Hellenic Telecommunications Org | Telenor ASA vs. Telefonica SA ADR | Telenor ASA vs. XL Axiata Tbk |
| Orange SA vs. Telefonica Brasil SA | Orange SA vs. Vodafone Group PLC | Orange SA vs. Grupo Televisa SAB | Orange SA vs. America Movil SAB |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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