Correlation Between Telefonica and DISH Network

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

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

Diversification Opportunities for Telefonica and DISH Network

0.27

Correlation Coefficient

Telefonica  DISH Network

Modest diversification

The 3 months correlation between Telefonica and DISH is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Telefonica SA ADR and DISH Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DISH Network and Telefonica 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 Telefonica SA ADR are associated (or correlated) with DISH Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DISH Network has no effect on the direction of Telefonica i.e., Telefonica and DISH Network go up and down completely randomly.

Pair Corralation between Telefonica and DISH Network

If you would invest  776.00  in DISH Network on October 26, 2024 and sell it today you would earn a total of  0.00  from holding DISH Network or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.56%
Values	Daily Returns

Telefonica SA ADR  vs.  DISH Network

Telefonica SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

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

DISH Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DISH Network has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, DISH Network is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Telefonica and DISH Network

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

The idea behind Telefonica SA ADR and DISH Network 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..