Correlation Between Telus Corp and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both Telus Corp and SPDR Portfolio 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 SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telus Corp and SPDR Portfolio SP, you can compare the effects of market volatilities on Telus Corp and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telus Corp and SPDR Portfolio.
Diversification Opportunities for Telus Corp and SPDR Portfolio
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telus and SPDR is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Telus Corp and SPDR Portfolio SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio SP 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio SP has no effect on the direction of Telus Corp i.e., Telus Corp and SPDR Portfolio go up and down completely randomly.
Pair Corralation between Telus Corp and SPDR Portfolio
Given the investment horizon of 90 days Telus Corp is expected to under-perform the SPDR Portfolio. But the stock apears to be less risky and, when comparing its historical volatility, Telus Corp is 1.0 times less risky than SPDR Portfolio. The stock trades about -0.04 of its potential returns per unit of risk. The SPDR Portfolio SP is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,924 in SPDR Portfolio SP on January 26, 2024 and sell it today you would earn a total of 2,124 from holding SPDR Portfolio SP or generate 43.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Telus Corp vs. SPDR Portfolio SP
Performance |
Timeline |
Telus Corp |
SPDR Portfolio SP |
Telus Corp and SPDR Portfolio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Telus Corp and SPDR Portfolio
The main advantage of trading using opposite Telus Corp and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telus Corp position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.Telus Corp vs. Berkshire Hathaway CDR | Telus Corp vs. Apple Inc CDR | Telus Corp vs. Microsoft Corp CDR | Telus Corp vs. Amazon CDR |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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