Correlation Between Tele2 AB and FingerMotion
Can any of the company-specific risk be diversified away by investing in both Tele2 AB and FingerMotion 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 Tele2 AB and FingerMotion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tele2 AB and FingerMotion, you can compare the effects of market volatilities on Tele2 AB and FingerMotion 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 Tele2 AB with a short position of FingerMotion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tele2 AB and FingerMotion.
Diversification Opportunities for Tele2 AB and FingerMotion
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tele2 and FingerMotion is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tele2 AB and FingerMotion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FingerMotion and Tele2 AB 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 Tele2 AB are associated (or correlated) with FingerMotion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FingerMotion has no effect on the direction of Tele2 AB i.e., Tele2 AB and FingerMotion go up and down completely randomly.
Pair Corralation between Tele2 AB and FingerMotion
Assuming the 90 days horizon Tele2 AB is expected to under-perform the FingerMotion. But the pink sheet apears to be less risky and, when comparing its historical volatility, Tele2 AB is 1.61 times less risky than FingerMotion. The pink sheet trades about -0.01 of its potential returns per unit of risk. The FingerMotion is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 188.00 in FingerMotion on September 1, 2024 and sell it today you would earn a total of 16.00 from holding FingerMotion or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tele2 AB vs. FingerMotion
Performance |
| Timeline |
| Tele2 AB |
| FingerMotion |
Tele2 AB and FingerMotion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tele2 AB and FingerMotion
The main advantage of trading using opposite Tele2 AB and FingerMotion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tele2 AB position performs unexpectedly, FingerMotion 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 FingerMotion will offset losses from the drop in FingerMotion's long position.| Tele2 AB vs. Proximus NV ADR | Tele2 AB vs. Telstra Limited | Tele2 AB vs. Singapore Telecommunications Limited | Tele2 AB vs. Vodafone Group PLC |
| FingerMotion vs. Liberty Broadband Srs | FingerMotion vs. KT Corporation | FingerMotion vs. Liberty Broadband Srs | FingerMotion vs. Consolidated Communications |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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