Correlation Between Magyar Telekom and Hellenic Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Magyar Telekom and Hellenic Telecommunicatio 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 Hellenic Telecommunicatio 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 Hellenic Telecommunications Org, you can compare the effects of market volatilities on Magyar Telekom and Hellenic Telecommunicatio 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 Hellenic Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Telekom and Hellenic Telecommunicatio.
Diversification Opportunities for Magyar Telekom and Hellenic Telecommunicatio
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magyar and Hellenic is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Telekom Plc and Hellenic Telecommunications Or in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hellenic Telecommunicatio 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 Hellenic Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hellenic Telecommunicatio has no effect on the direction of Magyar Telekom i.e., Magyar Telekom and Hellenic Telecommunicatio go up and down completely randomly.
Pair Corralation between Magyar Telekom and Hellenic Telecommunicatio
Assuming the 90 days horizon Magyar Telekom Plc is expected to generate 0.83 times more return on investment than Hellenic Telecommunicatio. However, Magyar Telekom Plc is 1.2 times less risky than Hellenic Telecommunicatio. It trades about 0.19 of its potential returns per unit of risk. Hellenic Telecommunications Org is currently generating about -0.11 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magyar Telekom Plc vs. Hellenic Telecommunications Or
Performance |
| Timeline |
| Magyar Telekom Plc |
| Hellenic Telecommunicatio |
Magyar Telekom and Hellenic Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Telekom and Hellenic Telecommunicatio
The main advantage of trading using opposite Magyar Telekom and Hellenic Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Telekom position performs unexpectedly, Hellenic Telecommunicatio 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 Hellenic Telecommunicatio will offset losses from the drop in Hellenic Telecommunicatio'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 |
| Hellenic Telecommunicatio vs. HUMANA INC | Hellenic Telecommunicatio vs. SCOR PK | Hellenic Telecommunicatio vs. Aquagold International | Hellenic Telecommunicatio vs. Barloworld Ltd ADR |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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