Correlation Between XL Axiata and Magyar Telekom
Can any of the company-specific risk be diversified away by investing in both XL Axiata and Magyar 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 XL Axiata and Magyar Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XL Axiata Tbk and Magyar Telekom Plc, you can compare the effects of market volatilities on XL Axiata and Magyar 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 XL Axiata with a short position of Magyar Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of XL Axiata and Magyar Telekom.
Diversification Opportunities for XL Axiata and Magyar Telekom
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PTXKY and Magyar is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding XL Axiata Tbk and Magyar Telekom Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magyar Telekom Plc and XL Axiata 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 XL Axiata Tbk are associated (or correlated) with Magyar Telekom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magyar Telekom Plc has no effect on the direction of XL Axiata i.e., XL Axiata and Magyar Telekom go up and down completely randomly.
Pair Corralation between XL Axiata and Magyar Telekom
Assuming the 90 days horizon XL Axiata Tbk is expected to under-perform the Magyar Telekom. In addition to that, XL Axiata is 2.32 times more volatile than Magyar Telekom Plc. It trades about -0.09 of its total potential returns per unit of risk. Magyar Telekom Plc is currently generating about 0.12 per unit of volatility. 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 Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
XL Axiata Tbk vs. Magyar Telekom Plc
Performance |
| Timeline |
| XL Axiata Tbk |
| Magyar Telekom Plc |
XL Axiata and Magyar Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XL Axiata and Magyar Telekom
The main advantage of trading using opposite XL Axiata and Magyar Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XL Axiata position performs unexpectedly, Magyar 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 Magyar Telekom will offset losses from the drop in Magyar Telekom's long position.| XL Axiata vs. MTN Group Ltd | XL Axiata vs. Vodacom Group Ltd | XL Axiata vs. Telenor ASA ADR | XL Axiata vs. KT Corporation |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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