Correlation Between Crexendo and Magyar Telekom
Can any of the company-specific risk be diversified away by investing in both Crexendo 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 Crexendo and Magyar Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crexendo and Magyar Telekom Plc, you can compare the effects of market volatilities on Crexendo 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 Crexendo with a short position of Magyar Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crexendo and Magyar Telekom.
Diversification Opportunities for Crexendo and Magyar Telekom
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Crexendo and Magyar is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Crexendo 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 Crexendo 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 Crexendo 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 Crexendo i.e., Crexendo and Magyar Telekom go up and down completely randomly.
Pair Corralation between Crexendo and Magyar Telekom
Given the investment horizon of 90 days Crexendo is expected to generate 2.01 times more return on investment than Magyar Telekom. However, Crexendo is 2.01 times more volatile than Magyar Telekom Plc. It trades about 0.19 of its potential returns per unit of risk. Magyar Telekom Plc is currently generating about 0.25 per unit of risk. If you would invest 558.00 in Crexendo on November 27, 2024 and sell it today you would earn a total of 76.00 from holding Crexendo or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Crexendo vs. Magyar Telekom Plc
Performance |
| Timeline |
| Crexendo |
| Magyar Telekom Plc |
Crexendo and Magyar Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crexendo and Magyar Telekom
The main advantage of trading using opposite Crexendo and Magyar Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crexendo 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.| Crexendo vs. Tele2 AB | Crexendo vs. Liberty Broadband Srs | Crexendo vs. KT Corporation | Crexendo vs. Liberty Broadband Srs |
| Magyar Telekom vs. SwissCom AG | Magyar Telekom vs. Hellenic Telecommunications Org | Magyar Telekom vs. Telefonica SA ADR | Magyar Telekom vs. Lumen Technologies |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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