Correlation Between Telstra and Althea Group
Can any of the company-specific risk be diversified away by investing in both Telstra and Althea Group 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 Telstra and Althea Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telstra and Althea Group Holdings, you can compare the effects of market volatilities on Telstra and Althea Group 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 Telstra with a short position of Althea Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telstra and Althea Group.
Diversification Opportunities for Telstra and Althea Group
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telstra and Althea is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Telstra and Althea Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Althea Group Holdings and Telstra 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 Telstra are associated (or correlated) with Althea Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Althea Group Holdings has no effect on the direction of Telstra i.e., Telstra and Althea Group go up and down completely randomly.
Pair Corralation between Telstra and Althea Group
If you would invest 398.00 in Telstra on October 21, 2024 and sell it today you would earn a total of 2.00 from holding Telstra or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telstra vs. Althea Group Holdings
Performance |
| Timeline |
| Telstra |
| Althea Group Holdings |
Telstra and Althea Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telstra and Althea Group
The main advantage of trading using opposite Telstra and Althea Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telstra position performs unexpectedly, Althea Group 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 Althea Group will offset losses from the drop in Althea Group's long position.| Telstra vs. Evolution Mining | Telstra vs. Perseus Mining | Telstra vs. Duketon Mining | Telstra vs. Truscott Mining Corp |
| Althea Group vs. Australian Unity Office | Althea Group vs. Magellan Financial Group | Althea Group vs. K2 Asset Management | Althea Group vs. Platinum Asset Management |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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