Correlation Between Magyar Telekom and KDDI Corp
Can any of the company-specific risk be diversified away by investing in both Magyar Telekom and KDDI Corp 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 KDDI Corp 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 KDDI Corp, you can compare the effects of market volatilities on Magyar Telekom and KDDI Corp 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 KDDI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Telekom and KDDI Corp.
Diversification Opportunities for Magyar Telekom and KDDI Corp
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magyar and KDDI is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Telekom Plc and KDDI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KDDI Corp 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 KDDI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KDDI Corp has no effect on the direction of Magyar Telekom i.e., Magyar Telekom and KDDI Corp go up and down completely randomly.
Pair Corralation between Magyar Telekom and KDDI Corp
Assuming the 90 days horizon Magyar Telekom Plc is expected to generate 0.81 times more return on investment than KDDI Corp. However, Magyar Telekom Plc is 1.24 times less risky than KDDI Corp. It trades about 0.18 of its potential returns per unit of risk. KDDI Corp is currently generating about -0.1 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 | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Magyar Telekom Plc vs. KDDI Corp
Performance |
| Timeline |
| Magyar Telekom Plc |
| KDDI Corp |
Magyar Telekom and KDDI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Telekom and KDDI Corp
The main advantage of trading using opposite Magyar Telekom and KDDI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Telekom position performs unexpectedly, KDDI Corp 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 KDDI Corp will offset losses from the drop in KDDI Corp'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 |
| KDDI Corp vs. Verizon Communications | KDDI Corp vs. ATT Inc | KDDI Corp vs. Pharvaris BV | KDDI Corp vs. Direxion Daily FTSE |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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