Correlation Between TelstraLimited and Telia Company
Can any of the company-specific risk be diversified away by investing in both TelstraLimited and Telia Company 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 TelstraLimited and Telia Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telstra Limited and Telia Company AB, you can compare the effects of market volatilities on TelstraLimited and Telia Company 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 TelstraLimited with a short position of Telia Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of TelstraLimited and Telia Company.
Diversification Opportunities for TelstraLimited and Telia Company
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TelstraLimited and Telia is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Telstra Limited and Telia Company AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telia Company and TelstraLimited 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 Telstra Limited are associated (or correlated) with Telia Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telia Company has no effect on the direction of TelstraLimited i.e., TelstraLimited and Telia Company go up and down completely randomly.
Pair Corralation between TelstraLimited and Telia Company
If you would invest 219.00 in Telstra Limited on November 3, 2024 and sell it today you would earn a total of 25.00 from holding Telstra Limited or generate 11.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Telstra Limited vs. Telia Company AB
Performance |
| Timeline |
| Telstra Limited |
| Telia Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TelstraLimited and Telia Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TelstraLimited and Telia Company
The main advantage of trading using opposite TelstraLimited and Telia Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TelstraLimited position performs unexpectedly, Telia Company 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 Telia Company will offset losses from the drop in Telia Company's long position.| TelstraLimited vs. Proximus NV ADR | TelstraLimited vs. Singapore Telecommunications Limited | TelstraLimited vs. MTN Group Ltd | TelstraLimited vs. Tele2 AB |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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