Correlation Between Magyar Telekom and Deutsche Telekom
Can any of the company-specific risk be diversified away by investing in both Magyar Telekom and Deutsche 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 Magyar Telekom and Deutsche Telekom 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 Deutsche Telekom AG, you can compare the effects of market volatilities on Magyar Telekom and Deutsche 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 Magyar Telekom with a short position of Deutsche Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Telekom and Deutsche Telekom.
Diversification Opportunities for Magyar Telekom and Deutsche Telekom
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magyar and Deutsche is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Telekom Plc and Deutsche Telekom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Telekom 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 Deutsche Telekom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Telekom has no effect on the direction of Magyar Telekom i.e., Magyar Telekom and Deutsche Telekom go up and down completely randomly.
Pair Corralation between Magyar Telekom and Deutsche Telekom
If you would invest 1,507 in Magyar Telekom Plc on September 3, 2024 and sell it today you would earn a total of 104.00 from holding Magyar Telekom Plc or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Magyar Telekom Plc vs. Deutsche Telekom AG
Performance |
| Timeline |
| Magyar Telekom Plc |
| Deutsche Telekom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Magyar Telekom and Deutsche Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Telekom and Deutsche Telekom
The main advantage of trading using opposite Magyar Telekom and Deutsche Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Telekom position performs unexpectedly, Deutsche 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 Deutsche Telekom will offset losses from the drop in Deutsche Telekom's long position.| Magyar Telekom vs. Telefonica Brasil SA | Magyar Telekom vs. Vodafone Group PLC | Magyar Telekom vs. Grupo Televisa SAB | Magyar Telekom vs. America Movil SAB |
| Deutsche Telekom vs. KDDI Corp PK | Deutsche Telekom vs. Nippon Telegraph Telephone | Deutsche Telekom vs. Softbank Group Corp | Deutsche Telekom vs. KT Corporation |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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