Correlation Between Telia Company and MTN Group
Can any of the company-specific risk be diversified away by investing in both Telia Company and MTN Group 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 Telia Company and MTN Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telia Company AB and MTN Group Ltd, you can compare the effects of market volatilities on Telia Company and MTN Group 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 Telia Company with a short position of MTN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and MTN Group.
Diversification Opportunities for Telia Company and MTN Group
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telia and MTN is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and MTN Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTN Group and Telia Company 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 Telia Company AB are associated (or correlated) with MTN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTN Group has no effect on the direction of Telia Company i.e., Telia Company and MTN Group go up and down completely randomly.
Pair Corralation between Telia Company and MTN Group
Assuming the 90 days horizon Telia Company AB is expected to generate 1.56 times more return on investment than MTN Group. However, Telia Company is 1.56 times more volatile than MTN Group Ltd. It trades about 0.03 of its potential returns per unit of risk. MTN Group Ltd is currently generating about -0.03 per unit of risk. If you would invest 275.00 in Telia Company AB on August 29, 2024 and sell it today you would earn a total of 35.00 from holding Telia Company AB or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.16% |
| Values | Daily Returns |
Telia Company AB vs. MTN Group Ltd
Performance |
| Timeline |
| Telia Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| MTN Group |
Telia Company and MTN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telia Company and MTN Group
The main advantage of trading using opposite Telia Company and MTN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telia Company position performs unexpectedly, MTN Group 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 MTN Group will offset losses from the drop in MTN Group's long position.| Telia Company vs. Lipocine | Telia Company vs. Live Ventures | Telia Company vs. Tscan Therapeutics | Telia Company vs. Franklin Street Properties |
| MTN Group vs. KDDI Corp | MTN Group vs. Amrica Mvil, SAB | MTN Group vs. ATT Inc | MTN Group vs. FingerMotion |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |