Correlation Between Telefnica Brasil and Cable One
Can any of the company-specific risk be diversified away by investing in both Telefnica Brasil and Cable One 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 Telefnica Brasil and Cable One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefnica Brasil SA and Cable One, you can compare the effects of market volatilities on Telefnica Brasil and Cable One 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 Telefnica Brasil with a short position of Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefnica Brasil and Cable One.
Diversification Opportunities for Telefnica Brasil and Cable One
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telefnica and Cable is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Telefnica Brasil SA and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One and Telefnica 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 Telefnica Brasil SA are associated (or correlated) with Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of Telefnica Brasil i.e., Telefnica Brasil and Cable One go up and down completely randomly.
Pair Corralation between Telefnica Brasil and Cable One
Assuming the 90 days trading horizon Telefnica Brasil SA is expected to generate 0.47 times more return on investment than Cable One. However, Telefnica Brasil SA is 2.14 times less risky than Cable One. It trades about 0.06 of its potential returns per unit of risk. Cable One is currently generating about -0.03 per unit of risk. If you would invest 3,426 in Telefnica Brasil SA on August 27, 2024 and sell it today you would earn a total of 1,674 from holding Telefnica Brasil SA or generate 48.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 68.83% |
| Values | Daily Returns |
Telefnica Brasil SA vs. Cable One
Performance |
| Timeline |
| Telefnica Brasil |
| Cable One |
Telefnica Brasil and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefnica Brasil and Cable One
The main advantage of trading using opposite Telefnica Brasil and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefnica Brasil position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| Telefnica Brasil vs. Engie Brasil Energia | Telefnica Brasil vs. BB Seguridade Participacoes | Telefnica Brasil vs. Transmissora Aliana de | Telefnica Brasil vs. CTEEP Companhia |
| Cable One vs. Extra Space Storage | Cable One vs. Ross Stores | Cable One vs. Delta Air Lines | Cable One vs. Unifique Telecomunicaes SA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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