Correlation Between Magyar Telekom and Raba Jarmuipari
Can any of the company-specific risk be diversified away by investing in both Magyar Telekom and Raba Jarmuipari 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 Raba Jarmuipari 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 Raba Jarmuipari Holding, you can compare the effects of market volatilities on Magyar Telekom and Raba Jarmuipari 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 Raba Jarmuipari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Telekom and Raba Jarmuipari.
Diversification Opportunities for Magyar Telekom and Raba Jarmuipari
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magyar and Raba is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Telekom PLC and Raba Jarmuipari Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raba Jarmuipari Holding 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 Raba Jarmuipari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raba Jarmuipari Holding has no effect on the direction of Magyar Telekom i.e., Magyar Telekom and Raba Jarmuipari go up and down completely randomly.
Pair Corralation between Magyar Telekom and Raba Jarmuipari
Assuming the 90 days trading horizon Magyar Telekom PLC is expected to generate 0.58 times more return on investment than Raba Jarmuipari. However, Magyar Telekom PLC is 1.73 times less risky than Raba Jarmuipari. It trades about 0.63 of its potential returns per unit of risk. Raba Jarmuipari Holding is currently generating about 0.03 per unit of risk. If you would invest 108,600 in Magyar Telekom PLC on August 28, 2024 and sell it today you would earn a total of 16,200 from holding Magyar Telekom PLC or generate 14.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.0% |
| Values | Daily Returns |
Magyar Telekom PLC vs. Raba Jarmuipari Holding
Performance |
| Timeline |
| Magyar Telekom PLC |
| Raba Jarmuipari Holding |
Magyar Telekom and Raba Jarmuipari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Telekom and Raba Jarmuipari
The main advantage of trading using opposite Magyar Telekom and Raba Jarmuipari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Telekom position performs unexpectedly, Raba Jarmuipari 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 Raba Jarmuipari will offset losses from the drop in Raba Jarmuipari's 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 |
| Raba Jarmuipari vs. Magyar Telekom PLC | Raba Jarmuipari vs. CIG Pannonia Life | Raba Jarmuipari vs. Infineon Technologies AG | Raba Jarmuipari vs. AKKO Invest 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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