Correlation Between Telia Company and TelstraLimited
Can any of the company-specific risk be diversified away by investing in both Telia Company and TelstraLimited 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 Telia Company and TelstraLimited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telia Company AB and Telstra Limited, you can compare the effects of market volatilities on Telia Company and TelstraLimited 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 Telia Company with a short position of TelstraLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and TelstraLimited.
Diversification Opportunities for Telia Company and TelstraLimited
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telia and TelstraLimited is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and Telstra Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telstra Limited and Telia Company 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 Telia Company AB are associated (or correlated) with TelstraLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telstra Limited has no effect on the direction of Telia Company i.e., Telia Company and TelstraLimited go up and down completely randomly.
Pair Corralation between Telia Company and TelstraLimited
If you would invest 310.00 in Telia Company AB on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Telia Company AB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 13.64% |
| Values | Daily Returns |
Telia Company AB vs. Telstra Limited
Performance |
| Timeline |
| Telia Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Telstra Limited |
Telia Company and TelstraLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telia Company and TelstraLimited
The main advantage of trading using opposite Telia Company and TelstraLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telia Company position performs unexpectedly, TelstraLimited 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 TelstraLimited will offset losses from the drop in TelstraLimited's long position.| Telia Company vs. Radcom | Telia Company vs. Meiwu Technology Co | Telia Company vs. The Gap, | Telia Company vs. Nike Inc |
| TelstraLimited vs. Proximus NV ADR | TelstraLimited vs. Singapore Telecommunications Limited | TelstraLimited vs. MTN Group Ltd | TelstraLimited vs. Tele2 AB |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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