Correlation Between 90331HPL1 and Telefonica

Can any of the company-specific risk be diversified away by investing in both 90331HPL1 and Telefonica 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 90331HPL1 and Telefonica into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US BANK NATIONAL and Telefonica SA ADR, you can compare the effects of market volatilities on 90331HPL1 and Telefonica 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 90331HPL1 with a short position of Telefonica. Check out your portfolio center. Please also check ongoing floating volatility patterns of 90331HPL1 and Telefonica.

Diversification Opportunities for 90331HPL1 and Telefonica

0.0

Correlation Coefficient

90331HPL1  Telefonica

Pay attention - limited upside

The 3 months correlation between 90331HPL1 and Telefonica is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US BANK NATIONAL and Telefonica SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefonica SA ADR and 90331HPL1 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 US BANK NATIONAL are associated (or correlated) with Telefonica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefonica SA ADR has no effect on the direction of 90331HPL1 i.e., 90331HPL1 and Telefonica go up and down completely randomly.

Pair Corralation between 90331HPL1 and Telefonica

If you would invest  423.00  in Telefonica SA ADR on March 12, 2024 and sell it today you would earn a total of  43.00  from holding Telefonica SA ADR or generate 10.17% return on investment over 90 days.

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

US BANK NATIONAL  vs.  Telefonica SA ADR

US BANK NATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US BANK NATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 90331HPL1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Telefonica SA ADR

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Telefonica SA ADR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Telefonica may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with 90331HPL1 and Telefonica

The main advantage of trading using opposite 90331HPL1 and Telefonica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 90331HPL1 position performs unexpectedly, Telefonica 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 Telefonica will offset losses from the drop in Telefonica's long position.

The idea behind US BANK NATIONAL and Telefonica SA ADR 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.