Correlation Between Tegna and AbbVie
Can any of the company-specific risk be diversified away by investing in both Tegna and AbbVie 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 Tegna and AbbVie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tegna Inc and AbbVie Inc, you can compare the effects of market volatilities on Tegna and AbbVie 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 Tegna with a short position of AbbVie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tegna and AbbVie.
Diversification Opportunities for Tegna and AbbVie
Average diversification
The 3 months correlation between Tegna and AbbVie is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Tegna Inc and AbbVie Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbbVie Inc and Tegna 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 Tegna Inc are associated (or correlated) with AbbVie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbbVie Inc has no effect on the direction of Tegna i.e., Tegna and AbbVie go up and down completely randomly.
Pair Corralation between Tegna and AbbVie
Given the investment horizon of 90 days Tegna Inc is expected to under-perform the AbbVie. But the stock apears to be less risky and, when comparing its historical volatility, Tegna Inc is 1.55 times less risky than AbbVie. The stock trades about -0.03 of its potential returns per unit of risk. The AbbVie Inc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 17,683 in AbbVie Inc on November 9, 2024 and sell it today you would earn a total of 1,614 from holding AbbVie Inc or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tegna Inc vs. AbbVie Inc
Performance |
| Timeline |
| Tegna Inc |
| AbbVie Inc |
Tegna and AbbVie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tegna and AbbVie
The main advantage of trading using opposite Tegna and AbbVie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tegna position performs unexpectedly, AbbVie 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 AbbVie will offset losses from the drop in AbbVie's long position.| Tegna vs. E W Scripps | Tegna vs. Gray Television | Tegna vs. iHeartMedia Class A | Tegna vs. Cumulus Media Class |
| AbbVie vs. Merck Company | AbbVie vs. Pfizer Inc | AbbVie vs. Eli Lilly and | AbbVie vs. Bristol Myers Squibb |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |