Correlation Between Deutsche Telekom and Magyar Telekom
Can any of the company-specific risk be diversified away by investing in both Deutsche Telekom 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 Deutsche Telekom and Magyar Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Telekom AG and Magyar Telekom Plc, you can compare the effects of market volatilities on Deutsche Telekom 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 Deutsche Telekom with a short position of Magyar Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Telekom and Magyar Telekom.
Diversification Opportunities for Deutsche Telekom and Magyar Telekom
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deutsche and Magyar is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Telekom AG 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 Deutsche Telekom 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 Deutsche Telekom AG 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 Deutsche Telekom i.e., Deutsche Telekom and Magyar Telekom go up and down completely randomly.
Pair Corralation between Deutsche Telekom and Magyar Telekom
If you would invest 1,507 in Magyar Telekom Plc on September 3, 2024 and sell it today you would earn a total of 104.00 from holding Magyar Telekom Plc or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Deutsche Telekom AG vs. Magyar Telekom Plc
Performance |
| Timeline |
| Deutsche Telekom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Magyar Telekom Plc |
Deutsche Telekom and Magyar Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Telekom and Magyar Telekom
The main advantage of trading using opposite Deutsche Telekom and Magyar Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Telekom 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.| Deutsche Telekom vs. KDDI Corp PK | Deutsche Telekom vs. Nippon Telegraph Telephone | Deutsche Telekom vs. Softbank Group Corp | Deutsche Telekom vs. KT Corporation |
| Magyar Telekom vs. Telefonica Brasil SA | Magyar Telekom vs. Vodafone Group PLC | Magyar Telekom vs. Grupo Televisa SAB | Magyar Telekom vs. America Movil SAB |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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