Correlation Between AKKO Invest and Magyar Telekom
Can any of the company-specific risk be diversified away by investing in both AKKO Invest and Magyar Telekom 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 AKKO Invest and Magyar Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKKO Invest Nyrt and Magyar Telekom PLC, you can compare the effects of market volatilities on AKKO Invest and Magyar Telekom 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 AKKO Invest with a short position of Magyar Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKKO Invest and Magyar Telekom.
Diversification Opportunities for AKKO Invest and Magyar Telekom
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AKKO and Magyar is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding AKKO Invest Nyrt and Magyar Telekom PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magyar Telekom PLC and AKKO Invest 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 AKKO Invest Nyrt are associated (or correlated) with Magyar Telekom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magyar Telekom PLC has no effect on the direction of AKKO Invest i.e., AKKO Invest and Magyar Telekom go up and down completely randomly.
Pair Corralation between AKKO Invest and Magyar Telekom
Assuming the 90 days trading horizon AKKO Invest is expected to generate 3.79 times less return on investment than Magyar Telekom. In addition to that, AKKO Invest is 2.6 times more volatile than Magyar Telekom PLC. It trades about 0.06 of its total potential returns per unit of risk. Magyar Telekom PLC is currently generating about 0.62 per unit of volatility. If you would invest 108,600 in Magyar Telekom PLC on August 29, 2024 and sell it today you would earn a total of 16,800 from holding Magyar Telekom PLC or generate 15.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKKO Invest Nyrt vs. Magyar Telekom PLC
Performance |
| Timeline |
| AKKO Invest Nyrt |
| Magyar Telekom PLC |
AKKO Invest and Magyar Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKKO Invest and Magyar Telekom
The main advantage of trading using opposite AKKO Invest and Magyar Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKKO Invest position performs unexpectedly, Magyar Telekom 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 Magyar Telekom will offset losses from the drop in Magyar Telekom's long position.| AKKO Invest vs. NordTelekom Telecommunications Service | AKKO Invest vs. Nutex Investments PLC | AKKO Invest vs. Delta Technologies Nyrt |
| Magyar Telekom vs. NordTelekom Telecommunications Service | Magyar Telekom vs. Nutex Investments PLC | Magyar Telekom vs. Commerzbank AG | Magyar Telekom vs. Delta Technologies Nyrt |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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