Correlation Between Rogers Communications and Telenor ASA

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

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

Diversification Opportunities for Rogers Communications and Telenor ASA

-0.28

Correlation Coefficient

Rogers Communications  Telenor ASA

Very good diversification

The 3 months correlation between Rogers and Telenor is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Communications and Telenor ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telenor ASA ADR and Rogers Communications 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 Rogers Communications 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 ADR has no effect on the direction of Rogers Communications i.e., Rogers Communications and Telenor ASA go up and down completely randomly.

Pair Corralation between Rogers Communications and Telenor ASA

Considering the 90-day investment horizon Rogers Communications is expected to under-perform the Telenor ASA. In addition to that, Rogers Communications is 1.41 times more volatile than Telenor ASA ADR. It trades about -0.22 of its total potential returns per unit of risk. Telenor ASA ADR is currently generating about 0.08 per unit of volatility. If you would invest  1,194  in Telenor ASA ADR on November 19, 2024 and sell it today you would earn a total of  65.00  from holding Telenor ASA ADR or generate 5.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Rogers Communications  vs.  Telenor ASA ADR

Rogers Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rogers Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Telenor ASA ADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Telenor ASA ADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Telenor ASA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rogers Communications and Telenor ASA

The main advantage of trading using opposite Rogers Communications and Telenor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers Communications 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 Rogers Communications and Telenor ASA ADR 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.