Correlation Between Telenor ASA and T Mobile
Can any of the company-specific risk be diversified away by investing in both Telenor ASA and T Mobile 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 T Mobile 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 T Mobile, you can compare the effects of market volatilities on Telenor ASA and T Mobile 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 T Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and T Mobile.
Diversification Opportunities for Telenor ASA and T Mobile
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telenor and TMUS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA ADR and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile 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 T Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of Telenor ASA i.e., Telenor ASA and T Mobile go up and down completely randomly.
Pair Corralation between Telenor ASA and T Mobile
Assuming the 90 days horizon Telenor ASA ADR is expected to under-perform the T Mobile. In addition to that, Telenor ASA is 1.1 times more volatile than T Mobile. It trades about -0.1 of its total potential returns per unit of risk. T Mobile is currently generating about 0.3 per unit of volatility. If you would invest 20,144 in T Mobile on August 25, 2024 and sell it today you would earn a total of 3,684 from holding T Mobile or generate 18.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telenor ASA ADR vs. T Mobile
Performance |
| Timeline |
| Telenor ASA ADR |
| T Mobile |
Telenor ASA and T Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and T Mobile
The main advantage of trading using opposite Telenor ASA and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, T Mobile 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 T Mobile will offset losses from the drop in T Mobile's long position.| Telenor ASA vs. HUMANA INC | Telenor ASA vs. SCOR PK | Telenor ASA vs. Aquagold International | Telenor ASA vs. Barloworld Ltd ADR |
| T Mobile vs. ATT Inc | T Mobile vs. Comcast Corp | T Mobile vs. Lumen Technologies | T Mobile vs. Verizon Communications |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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