Correlation Between TPG Telecom and MTN Group
Can any of the company-specific risk be diversified away by investing in both TPG Telecom 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 TPG Telecom and MTN Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPG Telecom Limited and MTN Group Ltd, you can compare the effects of market volatilities on TPG Telecom 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 TPG Telecom with a short position of MTN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPG Telecom and MTN Group.
Diversification Opportunities for TPG Telecom and MTN Group
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TPG and MTN is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding TPG Telecom Limited and MTN Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTN Group and TPG Telecom 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 TPG Telecom Limited 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 TPG Telecom i.e., TPG Telecom and MTN Group go up and down completely randomly.
Pair Corralation between TPG Telecom and MTN Group
If you would invest 373.00 in TPG Telecom Limited on August 29, 2024 and sell it today you would earn a total of 0.00 from holding TPG Telecom Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
TPG Telecom Limited vs. MTN Group Ltd
Performance |
| Timeline |
| TPG Telecom Limited |
| MTN Group |
TPG Telecom and MTN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPG Telecom and MTN Group
The main advantage of trading using opposite TPG Telecom and MTN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPG Telecom 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.| TPG Telecom vs. Origin Materials | TPG Telecom vs. Avient Corp | TPG Telecom vs. Ecolab Inc | TPG Telecom vs. Dave Busters Entertainment |
| MTN Group vs. XL Axiata Tbk | MTN Group vs. Telenor ASA ADR | MTN Group vs. KT Corporation | MTN Group vs. Vodacom Group Ltd |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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