Correlation Between Magyar Telekom and MOL Nyrt
Can any of the company-specific risk be diversified away by investing in both Magyar Telekom and MOL Nyrt 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 Magyar Telekom and MOL Nyrt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magyar Telekom PLC and MOL Nyrt, you can compare the effects of market volatilities on Magyar Telekom and MOL Nyrt 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 Magyar Telekom with a short position of MOL Nyrt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Telekom and MOL Nyrt.
Diversification Opportunities for Magyar Telekom and MOL Nyrt
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magyar and MOL is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Telekom PLC and MOL Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Nyrt and Magyar 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 Magyar Telekom PLC are associated (or correlated) with MOL Nyrt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL Nyrt has no effect on the direction of Magyar Telekom i.e., Magyar Telekom and MOL Nyrt go up and down completely randomly.
Pair Corralation between Magyar Telekom and MOL Nyrt
Assuming the 90 days trading horizon Magyar Telekom PLC is expected to generate 1.22 times more return on investment than MOL Nyrt. However, Magyar Telekom is 1.22 times more volatile than MOL Nyrt. It trades about 0.21 of its potential returns per unit of risk. MOL Nyrt is currently generating about 0.02 per unit of risk. If you would invest 32,650 in Magyar Telekom PLC on August 25, 2024 and sell it today you would earn a total of 91,750 from holding Magyar Telekom PLC or generate 281.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Magyar Telekom PLC vs. MOL Nyrt
Performance |
| Timeline |
| Magyar Telekom PLC |
| MOL Nyrt |
Magyar Telekom and MOL Nyrt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Telekom and MOL Nyrt
The main advantage of trading using opposite Magyar Telekom and MOL Nyrt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Telekom position performs unexpectedly, MOL Nyrt 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 MOL Nyrt will offset losses from the drop in MOL Nyrt's long position.| Magyar Telekom vs. Commerzbank AG | Magyar Telekom vs. OTP Bank Nyrt | Magyar Telekom vs. NordTelekom Telecommunications Service | Magyar Telekom vs. Nutex Investments PLC |
| MOL Nyrt vs. Magyar Telekom PLC | MOL Nyrt vs. Infineon Technologies AG | MOL Nyrt vs. AKKO Invest Nyrt | MOL Nyrt vs. Deutsche Lufthansa AG |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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