Correlation Between Trainers House and Telefonaktiebolaget
Can any of the company-specific risk be diversified away by investing in both Trainers House and Telefonaktiebolaget 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 Trainers House and Telefonaktiebolaget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trainers House Oyj and Telefonaktiebolaget LM Ericsson, you can compare the effects of market volatilities on Trainers House and Telefonaktiebolaget 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 Trainers House with a short position of Telefonaktiebolaget. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trainers House and Telefonaktiebolaget.
Diversification Opportunities for Trainers House and Telefonaktiebolaget
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trainers and Telefonaktiebolaget is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Trainers House Oyj and Telefonaktiebolaget LM Ericsso in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefonaktiebolaget and Trainers House 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 Trainers House Oyj are associated (or correlated) with Telefonaktiebolaget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefonaktiebolaget has no effect on the direction of Trainers House i.e., Trainers House and Telefonaktiebolaget go up and down completely randomly.
Pair Corralation between Trainers House and Telefonaktiebolaget
Assuming the 90 days trading horizon Trainers House is expected to generate 53.17 times less return on investment than Telefonaktiebolaget. In addition to that, Trainers House is 2.26 times more volatile than Telefonaktiebolaget LM Ericsson. It trades about 0.0 of its total potential returns per unit of risk. Telefonaktiebolaget LM Ericsson is currently generating about 0.21 per unit of volatility. If you would invest 483.00 in Telefonaktiebolaget LM Ericsson on September 3, 2024 and sell it today you would earn a total of 297.00 from holding Telefonaktiebolaget LM Ericsson or generate 61.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trainers House Oyj vs. Telefonaktiebolaget LM Ericsso
Performance |
| Timeline |
| Trainers House Oyj |
| Telefonaktiebolaget |
Trainers House and Telefonaktiebolaget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trainers House and Telefonaktiebolaget
The main advantage of trading using opposite Trainers House and Telefonaktiebolaget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trainers House position performs unexpectedly, Telefonaktiebolaget 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 Telefonaktiebolaget will offset losses from the drop in Telefonaktiebolaget's long position.| Trainers House vs. Telefonaktiebolaget LM Ericsson | Trainers House vs. Telia Company AB | Trainers House vs. SSAB AB ser | Trainers House vs. SSAB AB ser |
| Telefonaktiebolaget vs. Telia Company AB | Telefonaktiebolaget vs. SSAB AB ser | Telefonaktiebolaget vs. Kesko Oyj | Telefonaktiebolaget vs. Stora Enso Oyj |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |