Correlation Between TIM Participacoes and Telia Company
Can any of the company-specific risk be diversified away by investing in both TIM Participacoes and Telia Company 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 TIM Participacoes and Telia Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TIM Participacoes SA and Telia Company AB, you can compare the effects of market volatilities on TIM Participacoes and Telia Company 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 TIM Participacoes with a short position of Telia Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIM Participacoes and Telia Company.
Diversification Opportunities for TIM Participacoes and Telia Company
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TIM and Telia is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding TIM Participacoes SA and Telia Company AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telia Company and TIM Participacoes 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 TIM Participacoes SA are associated (or correlated) with Telia Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telia Company has no effect on the direction of TIM Participacoes i.e., TIM Participacoes and Telia Company go up and down completely randomly.
Pair Corralation between TIM Participacoes and Telia Company
If you would invest 1,184 in TIM Participacoes SA on November 3, 2024 and sell it today you would earn a total of 140.00 from holding TIM Participacoes SA or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
TIM Participacoes SA vs. Telia Company AB
Performance |
| Timeline |
| TIM Participacoes |
| Telia Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TIM Participacoes and Telia Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TIM Participacoes and Telia Company
The main advantage of trading using opposite TIM Participacoes and Telia Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIM Participacoes position performs unexpectedly, Telia Company 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 Telia Company will offset losses from the drop in Telia Company's long position.| TIM Participacoes vs. SK Telecom Co | TIM Participacoes vs. PLDT Inc ADR | TIM Participacoes vs. Liberty Broadband Srs | TIM Participacoes vs. Liberty Broadband Srs |
| Telia Company vs. MTN Group Ltd | Telia Company vs. Vodacom Group Ltd | Telia Company vs. Telenor ASA ADR | Telia Company vs. WideOpenWest |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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