Correlation Between Tele2 AB and PT Sarana
Can any of the company-specific risk be diversified away by investing in both Tele2 AB and PT Sarana 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 PT Sarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tele2 AB and PT Sarana Menara, you can compare the effects of market volatilities on Tele2 AB and PT Sarana 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 PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tele2 AB and PT Sarana.
Diversification Opportunities for Tele2 AB and PT Sarana
Modest diversification
The 3 months correlation between Tele2 and SMNUF is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tele2 AB and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara 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 PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of Tele2 AB i.e., Tele2 AB and PT Sarana go up and down completely randomly.
Pair Corralation between Tele2 AB and PT Sarana
Assuming the 90 days horizon Tele2 AB is expected to generate 0.26 times more return on investment than PT Sarana. However, Tele2 AB is 3.78 times less risky than PT Sarana. It trades about 0.02 of its potential returns per unit of risk. PT Sarana Menara is currently generating about -0.02 per unit of risk. If you would invest 454.00 in Tele2 AB on August 29, 2024 and sell it today you would earn a total of 45.00 from holding Tele2 AB or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 29.16% |
| Values | Daily Returns |
Tele2 AB vs. PT Sarana Menara
Performance |
| Timeline |
| Tele2 AB |
| PT Sarana Menara |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tele2 AB and PT Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tele2 AB and PT Sarana
The main advantage of trading using opposite Tele2 AB and PT Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tele2 AB position performs unexpectedly, PT Sarana 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 PT Sarana will offset losses from the drop in PT Sarana'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 |
| PT Sarana vs. Proximus NV ADR | PT Sarana vs. Singapore Telecommunications Limited | PT Sarana vs. Telstra Limited | PT Sarana vs. MTN Group Ltd |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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