Correlation Between XL Axiata and Telia Company
Can any of the company-specific risk be diversified away by investing in both XL Axiata and Telia Company 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 XL Axiata and Telia Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XL Axiata Tbk and Telia Company AB, you can compare the effects of market volatilities on XL Axiata and Telia Company 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 XL Axiata with a short position of Telia Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of XL Axiata and Telia Company.
Diversification Opportunities for XL Axiata and Telia Company
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PTXKY and Telia is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding XL Axiata Tbk and Telia Company AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telia Company and XL Axiata 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 XL Axiata Tbk are associated (or correlated) with Telia Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telia Company has no effect on the direction of XL Axiata i.e., XL Axiata and Telia Company go up and down completely randomly.
Pair Corralation between XL Axiata and Telia Company
Assuming the 90 days horizon XL Axiata Tbk is expected to generate 2.48 times more return on investment than Telia Company. However, XL Axiata is 2.48 times more volatile than Telia Company AB. It trades about 0.02 of its potential returns per unit of risk. Telia Company AB is currently generating about -0.09 per unit of risk. If you would invest 288.00 in XL Axiata Tbk on September 25, 2024 and sell it today you would lose (13.00) from holding XL Axiata Tbk or give up 4.51% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 5.47% |
Values | Daily Returns |
XL Axiata Tbk vs. Telia Company AB
Performance |
Timeline |
XL Axiata Tbk |
Telia Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
XL Axiata and Telia Company Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with XL Axiata and Telia Company
The main advantage of trading using opposite XL Axiata and Telia Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XL Axiata position performs unexpectedly, Telia Company 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 Telia Company will offset losses from the drop in Telia Company's long position.XL Axiata vs. Liberty Broadband Srs | XL Axiata vs. ATN International | XL Axiata vs. Shenandoah Telecommunications Co | XL Axiata vs. KT Corporation |
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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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