Correlation Between Telus Corp and Verizon Communications
Can any of the company-specific risk be diversified away by investing in both Telus Corp and Verizon Communications 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 Verizon Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telus Corp and Verizon Communications, you can compare the effects of market volatilities on Telus Corp and Verizon Communications 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 Verizon Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telus Corp and Verizon Communications.
Diversification Opportunities for Telus Corp and Verizon Communications
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telus and Verizon is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Telus Corp and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications 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 Verizon Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of Telus Corp i.e., Telus Corp and Verizon Communications go up and down completely randomly.
Pair Corralation between Telus Corp and Verizon Communications
Allowing for the 90-day total investment horizon Telus Corp is expected to generate 1.34 times more return on investment than Verizon Communications. However, Telus Corp is 1.34 times more volatile than Verizon Communications. It trades about 0.36 of its potential returns per unit of risk. Verizon Communications is currently generating about 0.27 per unit of risk. If you would invest 1,395 in Telus Corp on November 18, 2024 and sell it today you would earn a total of 143.00 from holding Telus Corp or generate 10.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telus Corp vs. Verizon Communications
Performance |
| Timeline |
| Telus Corp |
| Verizon Communications |
Telus Corp and Verizon Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telus Corp and Verizon Communications
The main advantage of trading using opposite Telus Corp and Verizon Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telus Corp position performs unexpectedly, Verizon Communications 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 Verizon Communications will offset losses from the drop in Verizon Communications' long position.| Telus Corp vs. Rogers Communications | Telus Corp vs. Vodafone Group PLC | Telus Corp vs. America Movil SAB | Telus Corp vs. BCE Inc |
| Verizon Communications vs. T Mobile | Verizon Communications vs. Lumen Technologies | Verizon Communications vs. Comcast Corp | Verizon Communications vs. ATT Inc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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