Correlation Between Telia Company and WideOpenWest

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

By analyzing existing cross correlation between Telia Company AB and WideOpenWest, you can compare the effects of market volatilities on Telia Company and WideOpenWest 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 Telia Company with a short position of WideOpenWest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and WideOpenWest.

Diversification Opportunities for Telia Company and WideOpenWest

0.02

Correlation Coefficient

Telia Company  WideOpenWest

Significant diversification

The 3 months correlation between Telia and WideOpenWest is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and WideOpenWest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WideOpenWest and Telia Company 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 Telia Company AB are associated (or correlated) with WideOpenWest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WideOpenWest has no effect on the direction of Telia Company i.e., Telia Company and WideOpenWest go up and down completely randomly.

Pair Corralation between Telia Company and WideOpenWest

If you would invest (100.00) in Telia Company AB on September 5, 2024 and sell it today you would earn a total of  100.00  from holding Telia Company AB or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Telia Company AB  vs.  WideOpenWest

Telia Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telia Company AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Telia Company is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

WideOpenWest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WideOpenWest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Telia Company and WideOpenWest

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

The idea behind Telia Company AB and WideOpenWest 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.