Correlation Between Mizuho Financial and Telenor ASA

Can any of the company-specific risk be diversified away by investing in both Mizuho Financial and Telenor ASA 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 Mizuho Financial and Telenor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mizuho Financial Group and Telenor ASA, you can compare the effects of market volatilities on Mizuho Financial and Telenor ASA 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 Mizuho Financial with a short position of Telenor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizuho Financial and Telenor ASA.

Diversification Opportunities for Mizuho Financial and Telenor ASA

-0.75

Correlation Coefficient

Mizuho Financial  Telenor ASA

Pay attention - limited upside

The 3 months correlation between Mizuho and Telenor is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mizuho Financial Group and Telenor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telenor ASA and Mizuho Financial 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 Mizuho Financial Group are associated (or correlated) with Telenor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telenor ASA has no effect on the direction of Mizuho Financial i.e., Mizuho Financial and Telenor ASA go up and down completely randomly.

Pair Corralation between Mizuho Financial and Telenor ASA

Considering the 90-day investment horizon Mizuho Financial Group is expected to generate 1.4 times more return on investment than Telenor ASA. However, Mizuho Financial is 1.4 times more volatile than Telenor ASA. It trades about -0.04 of its potential returns per unit of risk. Telenor ASA is currently generating about -0.35 per unit of risk. If you would invest  495.00  in Mizuho Financial Group on September 25, 2024 and sell it today you would lose (7.00) from holding Mizuho Financial Group or give up 1.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Mizuho Financial Group  vs.  Telenor ASA

Mizuho Financial

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mizuho Financial Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Mizuho Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Telenor ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telenor ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Mizuho Financial and Telenor ASA

The main advantage of trading using opposite Mizuho Financial and Telenor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizuho Financial position performs unexpectedly, Telenor ASA 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 Telenor ASA will offset losses from the drop in Telenor ASA's long position.

The idea behind Mizuho Financial Group and Telenor ASA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.