Correlation Between EMedia Holdings and MTN
Can any of the company-specific risk be diversified away by investing in both EMedia Holdings and MTN 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 EMedia Holdings and MTN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eMedia Holdings Limited and MTN Group, you can compare the effects of market volatilities on EMedia Holdings and MTN 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 EMedia Holdings with a short position of MTN. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMedia Holdings and MTN.
Diversification Opportunities for EMedia Holdings and MTN
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EMedia and MTN is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding eMedia Holdings Limited and MTN Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTN Group and EMedia Holdings 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 eMedia Holdings Limited are associated (or correlated) with MTN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTN Group has no effect on the direction of EMedia Holdings i.e., EMedia Holdings and MTN go up and down completely randomly.
Pair Corralation between EMedia Holdings and MTN
Assuming the 90 days trading horizon eMedia Holdings Limited is expected to generate 1.22 times more return on investment than MTN. However, EMedia Holdings is 1.22 times more volatile than MTN Group. It trades about 0.03 of its potential returns per unit of risk. MTN Group is currently generating about -0.04 per unit of risk. If you would invest 31,500 in eMedia Holdings Limited on September 12, 2024 and sell it today you would earn a total of 6,000 from holding eMedia Holdings Limited or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
eMedia Holdings Limited vs. MTN Group
Performance |
| Timeline |
| eMedia Holdings |
| MTN Group |
EMedia Holdings and MTN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMedia Holdings and MTN
The main advantage of trading using opposite EMedia Holdings and MTN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMedia Holdings position performs unexpectedly, MTN 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 MTN will offset losses from the drop in MTN's long position.| EMedia Holdings vs. E Media Holdings | EMedia Holdings vs. Sasol Ltd Bee | EMedia Holdings vs. Centaur Bci Balanced | EMedia Holdings vs. Sabvest Capital |
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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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