Correlation Between Magyar Telekom and Nutex Investments
Can any of the company-specific risk be diversified away by investing in both Magyar Telekom and Nutex Investments 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 Nutex Investments 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 Nutex Investments PLC, you can compare the effects of market volatilities on Magyar Telekom and Nutex Investments 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 Nutex Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Telekom and Nutex Investments.
Diversification Opportunities for Magyar Telekom and Nutex Investments
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Magyar and Nutex is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Telekom PLC and Nutex Investments PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutex Investments PLC 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 Nutex Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutex Investments PLC has no effect on the direction of Magyar Telekom i.e., Magyar Telekom and Nutex Investments go up and down completely randomly.
Pair Corralation between Magyar Telekom and Nutex Investments
Assuming the 90 days trading horizon Magyar Telekom is expected to generate 5.42 times less return on investment than Nutex Investments. But when comparing it to its historical volatility, Magyar Telekom PLC is 9.04 times less risky than Nutex Investments. It trades about 0.32 of its potential returns per unit of risk. Nutex Investments PLC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,855 in Nutex Investments PLC on September 18, 2024 and sell it today you would earn a total of 625.00 from holding Nutex Investments PLC or generate 33.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magyar Telekom PLC vs. Nutex Investments PLC
Performance |
| Timeline |
| Magyar Telekom PLC |
| Nutex Investments PLC |
Magyar Telekom and Nutex Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Telekom and Nutex Investments
The main advantage of trading using opposite Magyar Telekom and Nutex Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Telekom position performs unexpectedly, Nutex Investments 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 Nutex Investments will offset losses from the drop in Nutex Investments' long position.| Magyar Telekom vs. OTP Bank Nyrt | Magyar Telekom vs. MOL Nyrt | Magyar Telekom vs. OPUS GLOBAL Nyrt | Magyar Telekom vs. ALTEO Energiaszolgaltato Nyrt |
| Nutex Investments vs. NordTelekom Telecommunications Service | Nutex Investments vs. Infineon Technologies AG | Nutex Investments vs. AKKO Invest Nyrt | Nutex Investments vs. Raba Jarmuipari Holding |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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