Correlation Between Magyar Telekom and Crexendo
Can any of the company-specific risk be diversified away by investing in both Magyar Telekom and Crexendo 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 Crexendo 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 Crexendo, you can compare the effects of market volatilities on Magyar Telekom and Crexendo 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 Crexendo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Telekom and Crexendo.
Diversification Opportunities for Magyar Telekom and Crexendo
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Magyar and Crexendo is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Telekom Plc and Crexendo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crexendo 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 Crexendo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crexendo has no effect on the direction of Magyar Telekom i.e., Magyar Telekom and Crexendo go up and down completely randomly.
Pair Corralation between Magyar Telekom and Crexendo
Assuming the 90 days horizon Magyar Telekom Plc is expected to generate 0.57 times more return on investment than Crexendo. However, Magyar Telekom Plc is 1.74 times less risky than Crexendo. It trades about 0.18 of its potential returns per unit of risk. Crexendo is currently generating about -0.08 per unit of risk. If you would invest 1,447 in Magyar Telekom Plc on August 29, 2024 and sell it today you would earn a total of 120.00 from holding Magyar Telekom Plc or generate 8.29% 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. Crexendo
Performance |
| Timeline |
| Magyar Telekom Plc |
| Crexendo |
Magyar Telekom and Crexendo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Telekom and Crexendo
The main advantage of trading using opposite Magyar Telekom and Crexendo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Telekom position performs unexpectedly, Crexendo 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 Crexendo will offset losses from the drop in Crexendo's long position.| Magyar Telekom vs. SwissCom AG | Magyar Telekom vs. Hellenic Telecommunications Org | Magyar Telekom vs. Telefonica SA ADR | Magyar Telekom vs. Lumen Technologies |
| Crexendo vs. Tele2 AB | Crexendo vs. Liberty Broadband Srs | Crexendo vs. KT Corporation | Crexendo vs. Liberty Broadband Srs |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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