Correlation Between Mizuho Financial and Magyar Telekom
Can any of the company-specific risk be diversified away by investing in both Mizuho Financial 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 Mizuho Financial and Magyar Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizuho Financial Group and Magyar Telekom Plc, you can compare the effects of market volatilities on Mizuho Financial 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 Mizuho Financial with a short position of Magyar Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizuho Financial and Magyar Telekom.
Diversification Opportunities for Mizuho Financial and Magyar Telekom
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mizuho and Magyar is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mizuho Financial Group 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 Mizuho Financial 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 Mizuho Financial Group 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 Mizuho Financial i.e., Mizuho Financial and Magyar Telekom go up and down completely randomly.
Pair Corralation between Mizuho Financial and Magyar Telekom
Considering the 90-day investment horizon Mizuho Financial is expected to generate 1.06 times less return on investment than Magyar Telekom. But when comparing it to its historical volatility, Mizuho Financial Group is 1.04 times less risky than Magyar Telekom. It trades about 0.08 of its potential returns per unit of risk. Magyar Telekom Plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,108 in Magyar Telekom Plc on August 25, 2024 and sell it today you would earn a total of 407.00 from holding Magyar Telekom Plc or generate 36.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mizuho Financial Group vs. Magyar Telekom Plc
Performance |
| Timeline |
| Mizuho Financial |
| Magyar Telekom Plc |
Mizuho Financial and Magyar Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizuho Financial and Magyar Telekom
The main advantage of trading using opposite Mizuho Financial and Magyar Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizuho Financial 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.| Mizuho Financial vs. Banco Santander Chile | Mizuho Financial vs. Itau Unibanco Banco | Mizuho Financial vs. Banco De Chile | Mizuho Financial vs. Banco Bradesco SA |
| Magyar Telekom vs. HUMANA INC | Magyar Telekom vs. SCOR PK | Magyar Telekom vs. Aquagold International | Magyar Telekom vs. Barloworld Ltd ADR |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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