Correlation Between Magyar Telekom and ATT
Can any of the company-specific risk be diversified away by investing in both Magyar Telekom and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Magyar Telekom and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Telekom and ATT.
Diversification Opportunities for Magyar Telekom and ATT
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magyar and ATT is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Telekom Plc and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Magyar Telekom i.e., Magyar Telekom and ATT go up and down completely randomly.
Pair Corralation between Magyar Telekom and ATT
Assuming the 90 days horizon Magyar Telekom Plc is expected to generate 2.07 times more return on investment than ATT. However, Magyar Telekom is 2.07 times more volatile than ATT Inc. It trades about 0.12 of its potential returns per unit of risk. ATT Inc is currently generating about 0.14 per unit of risk. If you would invest 1,502 in Magyar Telekom Plc on September 1, 2024 and sell it today you would earn a total of 72.00 from holding Magyar Telekom Plc or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magyar Telekom Plc vs. ATT Inc
Performance |
| Timeline |
| Magyar Telekom Plc |
| ATT Inc |
Magyar Telekom and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Telekom and ATT
The main advantage of trading using opposite Magyar Telekom and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Telekom position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| Magyar Telekom vs. HUMANA INC | Magyar Telekom vs. Aquagold International | Magyar Telekom vs. Barloworld Ltd ADR | Magyar Telekom vs. Thrivent High Yield |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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