Correlation Between Telus Corp and TIM Participacoes
Can any of the company-specific risk be diversified away by investing in both Telus Corp and TIM Participacoes 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 Telus Corp and TIM Participacoes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telus Corp and TIM Participacoes SA, you can compare the effects of market volatilities on Telus Corp and TIM Participacoes 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 Telus Corp with a short position of TIM Participacoes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telus Corp and TIM Participacoes.
Diversification Opportunities for Telus Corp and TIM Participacoes
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Telus and TIM is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Telus Corp and TIM Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIM Participacoes and Telus Corp 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 Telus Corp are associated (or correlated) with TIM Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIM Participacoes has no effect on the direction of Telus Corp i.e., Telus Corp and TIM Participacoes go up and down completely randomly.
Pair Corralation between Telus Corp and TIM Participacoes
Allowing for the 90-day total investment horizon Telus Corp is expected to generate 0.69 times more return on investment than TIM Participacoes. However, Telus Corp is 1.44 times less risky than TIM Participacoes. It trades about -0.15 of its potential returns per unit of risk. TIM Participacoes SA is currently generating about -0.28 per unit of risk. If you would invest 1,678 in Telus Corp on August 30, 2024 and sell it today you would lose (131.00) from holding Telus Corp or give up 7.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
Telus Corp vs. TIM Participacoes SA
Performance |
| Timeline |
| Telus Corp |
| TIM Participacoes |
Telus Corp and TIM Participacoes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telus Corp and TIM Participacoes
The main advantage of trading using opposite Telus Corp and TIM Participacoes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telus Corp position performs unexpectedly, TIM Participacoes 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 TIM Participacoes will offset losses from the drop in TIM Participacoes' long position.| Telus Corp vs. Rogers Communications | Telus Corp vs. Vodafone Group PLC | Telus Corp vs. Orange SA ADR | Telus Corp vs. America Movil SAB |
| TIM Participacoes vs. SK Telecom Co | TIM Participacoes vs. PLDT Inc ADR | TIM Participacoes vs. Liberty Broadband Srs | TIM Participacoes vs. Liberty Broadband Srs |
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.
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