Correlation Between Telefonica Brasil and Telus Corp
Can any of the company-specific risk be diversified away by investing in both Telefonica Brasil and Telus Corp 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 Telefonica Brasil and Telus Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonica Brasil SA and Telus Corp, you can compare the effects of market volatilities on Telefonica Brasil and Telus Corp 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 Telefonica Brasil with a short position of Telus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonica Brasil and Telus Corp.
Diversification Opportunities for Telefonica Brasil and Telus Corp
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Telefonica and Telus is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Telefonica Brasil SA and Telus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telus Corp and Telefonica Brasil 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 Telefonica Brasil SA are associated (or correlated) with Telus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telus Corp has no effect on the direction of Telefonica Brasil i.e., Telefonica Brasil and Telus Corp go up and down completely randomly.
Pair Corralation between Telefonica Brasil and Telus Corp
Considering the 90-day investment horizon Telefonica Brasil SA is expected to generate 1.45 times more return on investment than Telus Corp. However, Telefonica Brasil is 1.45 times more volatile than Telus Corp. It trades about 0.04 of its potential returns per unit of risk. Telus Corp is currently generating about -0.03 per unit of risk. If you would invest 673.00 in Telefonica Brasil SA on August 23, 2024 and sell it today you would earn a total of 198.00 from holding Telefonica Brasil SA or generate 29.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telefonica Brasil SA vs. Telus Corp
Performance |
| Timeline |
| Telefonica Brasil |
| Telus Corp |
Telefonica Brasil and Telus Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonica Brasil and Telus Corp
The main advantage of trading using opposite Telefonica Brasil and Telus Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonica Brasil position performs unexpectedly, Telus Corp 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 Telus Corp will offset losses from the drop in Telus Corp's long position.| Telefonica Brasil vs. Orange SA ADR | Telefonica Brasil vs. Vodafone Group PLC | Telefonica Brasil vs. Grupo Televisa SAB | Telefonica Brasil vs. America Movil SAB |
| Telus Corp vs. Rogers Communications | Telus Corp vs. Vodafone Group PLC | Telus Corp vs. Orange SA ADR | Telus Corp vs. America Movil SAB |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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