Correlation Between T Mobile and Telenor ASA
Can any of the company-specific risk be diversified away by investing in both T Mobile 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 T Mobile and Telenor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Mobile and Telenor ASA ADR, you can compare the effects of market volatilities on T Mobile 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 T Mobile with a short position of Telenor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Mobile and Telenor ASA.
Diversification Opportunities for T Mobile and Telenor ASA
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TMUS and Telenor is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile 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 T Mobile 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 T Mobile 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 T Mobile i.e., T Mobile and Telenor ASA go up and down completely randomly.
Pair Corralation between T Mobile and Telenor ASA
Given the investment horizon of 90 days T Mobile is expected to under-perform the Telenor ASA. In addition to that, T Mobile is 1.34 times more volatile than Telenor ASA ADR. It trades about -0.26 of its total potential returns per unit of risk. Telenor ASA ADR is currently generating about -0.26 per unit of volatility. If you would invest 1,180 in Telenor ASA ADR on September 28, 2024 and sell it today you would lose (81.00) from holding Telenor ASA ADR or give up 6.86% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
T Mobile vs. Telenor ASA ADR
Performance |
Timeline |
T Mobile |
Telenor ASA ADR |
T Mobile and Telenor ASA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with T Mobile and Telenor ASA
The main advantage of trading using opposite T Mobile and Telenor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Mobile 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.T Mobile vs. ATT Inc | T Mobile vs. Comcast Corp | T Mobile vs. Lumen Technologies | T Mobile vs. Verizon Communications |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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