Correlation Between Telia Company and Magyar Telekom
Can any of the company-specific risk be diversified away by investing in both Telia Company 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 Telia Company and Magyar Telekom 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 Magyar Telekom Plc, you can compare the effects of market volatilities on Telia Company 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 Telia Company with a short position of Magyar Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and Magyar Telekom.
Diversification Opportunities for Telia Company and Magyar Telekom
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telia and Magyar is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB 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 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 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 Telia Company i.e., Telia Company and Magyar Telekom go up and down completely randomly.
Pair Corralation between Telia Company and Magyar Telekom
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 | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Telia Company AB vs. Magyar Telekom Plc
Performance |
| Timeline |
| Telia Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Magyar Telekom Plc |
Telia Company and Magyar Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telia Company and Magyar Telekom
The main advantage of trading using opposite Telia Company and Magyar Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telia Company 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.| Telia Company vs. MTN Group Ltd | Telia Company vs. Vodacom Group Ltd | Telia Company vs. Telenor ASA ADR | Telia Company vs. WideOpenWest |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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