Correlation Between Magyar Telekom and IDT
Can any of the company-specific risk be diversified away by investing in both Magyar Telekom and IDT 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 IDT 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 IDT Corporation, you can compare the effects of market volatilities on Magyar Telekom and IDT 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 IDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Telekom and IDT.
Diversification Opportunities for Magyar Telekom and IDT
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magyar and IDT is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Telekom Plc and IDT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDT Corporation 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 IDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDT Corporation has no effect on the direction of Magyar Telekom i.e., Magyar Telekom and IDT go up and down completely randomly.
Pair Corralation between Magyar Telekom and IDT
Assuming the 90 days horizon Magyar Telekom Plc is expected to generate 0.82 times more return on investment than IDT. However, Magyar Telekom Plc is 1.22 times less risky than IDT. It trades about 0.14 of its potential returns per unit of risk. IDT Corporation is currently generating about 0.07 per unit of risk. If you would invest 1,014 in Magyar Telekom Plc on November 3, 2024 and sell it today you would earn a total of 732.00 from holding Magyar Telekom Plc or generate 72.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magyar Telekom Plc vs. IDT Corp.
Performance |
| Timeline |
| Magyar Telekom Plc |
| IDT Corporation |
Magyar Telekom and IDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Telekom and IDT
The main advantage of trading using opposite Magyar Telekom and IDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Telekom position performs unexpectedly, IDT 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 IDT will offset losses from the drop in IDT'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 |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |