Correlation Between ENEFI Energiahatekonys and NordTelekom Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both ENEFI Energiahatekonys and NordTelekom Telecommunicatio 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 ENEFI Energiahatekonys and NordTelekom Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENEFI Energiahatekonysagi Nyrt and NordTelekom Telecommunications Service, you can compare the effects of market volatilities on ENEFI Energiahatekonys and NordTelekom Telecommunicatio 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 ENEFI Energiahatekonys with a short position of NordTelekom Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENEFI Energiahatekonys and NordTelekom Telecommunicatio.
Diversification Opportunities for ENEFI Energiahatekonys and NordTelekom Telecommunicatio
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ENEFI and NordTelekom is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding ENEFI Energiahatekonysagi Nyrt and NordTelekom Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NordTelekom Telecommunicatio and ENEFI Energiahatekonys 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 ENEFI Energiahatekonysagi Nyrt are associated (or correlated) with NordTelekom Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NordTelekom Telecommunicatio has no effect on the direction of ENEFI Energiahatekonys i.e., ENEFI Energiahatekonys and NordTelekom Telecommunicatio go up and down completely randomly.
Pair Corralation between ENEFI Energiahatekonys and NordTelekom Telecommunicatio
Assuming the 90 days trading horizon ENEFI Energiahatekonysagi Nyrt is expected to generate 1.08 times more return on investment than NordTelekom Telecommunicatio. However, ENEFI Energiahatekonys is 1.08 times more volatile than NordTelekom Telecommunications Service. It trades about 0.04 of its potential returns per unit of risk. NordTelekom Telecommunications Service is currently generating about 0.02 per unit of risk. If you would invest 16,000 in ENEFI Energiahatekonysagi Nyrt on August 29, 2024 and sell it today you would earn a total of 7,600 from holding ENEFI Energiahatekonysagi Nyrt or generate 47.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.11% |
| Values | Daily Returns |
ENEFI Energiahatekonysagi Nyrt vs. NordTelekom Telecommunications
Performance |
| Timeline |
| ENEFI Energiahatekonys |
| NordTelekom Telecommunicatio |
ENEFI Energiahatekonys and NordTelekom Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENEFI Energiahatekonys and NordTelekom Telecommunicatio
The main advantage of trading using opposite ENEFI Energiahatekonys and NordTelekom Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENEFI Energiahatekonys position performs unexpectedly, NordTelekom Telecommunicatio 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 NordTelekom Telecommunicatio will offset losses from the drop in NordTelekom Telecommunicatio's long position.| ENEFI Energiahatekonys vs. NordTelekom Telecommunications Service | ENEFI Energiahatekonys vs. OTP Bank Nyrt | ENEFI Energiahatekonys vs. Infineon Technologies AG |
| NordTelekom Telecommunicatio vs. OTP Bank Nyrt | NordTelekom Telecommunicatio vs. MOL Nyrt | NordTelekom Telecommunicatio vs. OPUS GLOBAL Nyrt | NordTelekom Telecommunicatio vs. ALTEO Energiaszolgaltato 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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