Correlation Between Telia Company and Thule Group

Can any of the company-specific risk be diversified away by investing in both Telia Company and Thule Group 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 Thule Group 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 Thule Group AB, you can compare the effects of market volatilities on Telia Company and Thule Group 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 Thule Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and Thule Group.

Diversification Opportunities for Telia Company and Thule Group

-0.59

Correlation Coefficient

Telia Company  Thule Group

Excellent diversification

The 3 months correlation between Telia and Thule is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and Thule Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thule Group AB 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 Thule Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thule Group AB has no effect on the direction of Telia Company i.e., Telia Company and Thule Group go up and down completely randomly.

Pair Corralation between Telia Company and Thule Group

Assuming the 90 days trading horizon Telia Company is expected to generate 4.54 times less return on investment than Thule Group. But when comparing it to its historical volatility, Telia Company AB is 2.41 times less risky than Thule Group. It trades about 0.03 of its potential returns per unit of risk. Thule Group AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  25,852  in Thule Group AB on April 23, 2025 and sell it today you would earn a total of  1,808  from holding Thule Group AB or generate 6.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Telia Company AB  vs.  Thule Group AB

Telia Company

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Telia Company AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Telia Company is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Thule Group AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thule Group AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Thule Group may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Telia Company and Thule Group

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

The idea behind Telia Company AB and Thule Group AB 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.