Correlation Between Telus Corp and Thunderbird Entertainment

Can any of the company-specific risk be diversified away by investing in both Telus Corp and Thunderbird Entertainment 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 Telus Corp and Thunderbird Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Telus Corp and Thunderbird Entertainment

0.49

Correlation Coefficient

Telus Corp  Thunderbird Entertainment

Very weak diversification

The 3 months correlation between Telus and Thunderbird is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Telus Corp and Thunderbird Entertainment Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderbird Entertainment and Telus Corp 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 Telus Corp are associated (or correlated) with Thunderbird Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderbird Entertainment has no effect on the direction of Telus Corp i.e., Telus Corp and Thunderbird Entertainment go up and down completely randomly.

Pair Corralation between Telus Corp and Thunderbird Entertainment

Given the investment horizon of 90 days Telus Corp is expected to generate 0.36 times more return on investment than Thunderbird Entertainment. However, Telus Corp is 2.75 times less risky than Thunderbird Entertainment. It trades about 0.0 of its potential returns per unit of risk. Thunderbird Entertainment Group is currently generating about -0.07 per unit of risk. If you would invest  2,183  in Telus Corp on September 3, 2024 and sell it today you would lose (3.00) from holding Telus Corp or give up 0.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Telus Corp  vs.  Thunderbird Entertainment Grou

Telus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Telus Corp is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Thunderbird Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thunderbird Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Telus Corp and Thunderbird Entertainment

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

The idea behind Telus Corp and Thunderbird Entertainment Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.