Correlation Between Telia Company and Koninklijke KPN
Can any of the company-specific risk be diversified away by investing in both Telia Company and Koninklijke KPN 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 Koninklijke KPN 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 Koninklijke KPN NV, you can compare the effects of market volatilities on Telia Company and Koninklijke KPN 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 Koninklijke KPN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and Koninklijke KPN.
Diversification Opportunities for Telia Company and Koninklijke KPN
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telia and Koninklijke is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and Koninklijke KPN NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke KPN NV 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 Koninklijke KPN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke KPN NV has no effect on the direction of Telia Company i.e., Telia Company and Koninklijke KPN go up and down completely randomly.
Pair Corralation between Telia Company and Koninklijke KPN
If you would invest 334.00 in Koninklijke KPN NV on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Koninklijke KPN NV or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telia Company AB vs. Koninklijke KPN NV
Performance |
| Timeline |
| Telia Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Koninklijke KPN NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Telia Company and Koninklijke KPN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telia Company and Koninklijke KPN
The main advantage of trading using opposite Telia Company and Koninklijke KPN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telia Company position performs unexpectedly, Koninklijke KPN 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 Koninklijke KPN will offset losses from the drop in Koninklijke KPN's long position.| Telia Company vs. MTN Group Ltd | Telia Company vs. Vodacom Group Ltd | Telia Company vs. Telenor ASA ADR | Telia Company vs. WideOpenWest |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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