Correlation Between U S Cellular and MTN Group
Can any of the company-specific risk be diversified away by investing in both U S Cellular 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 U S Cellular and MTN Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Cellular and MTN Group Ltd, you can compare the effects of market volatilities on U S Cellular 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 U S Cellular with a short position of MTN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of U S Cellular and MTN Group.
Diversification Opportunities for U S Cellular and MTN Group
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between USM and MTN is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding United States Cellular and MTN Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTN Group and U S Cellular 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 United States Cellular 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 U S Cellular i.e., U S Cellular and MTN Group go up and down completely randomly.
Pair Corralation between U S Cellular and MTN Group
Considering the 90-day investment horizon U S Cellular is expected to generate 58.63 times less return on investment than MTN Group. But when comparing it to its historical volatility, United States Cellular is 3.08 times less risky than MTN Group. It trades about 0.02 of its potential returns per unit of risk. MTN Group Ltd is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 488.00 in MTN Group Ltd on November 3, 2024 and sell it today you would earn a total of 129.00 from holding MTN Group Ltd or generate 26.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Cellular vs. MTN Group Ltd
Performance |
| Timeline |
| United States Cellular |
| MTN Group |
U S Cellular and MTN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U S Cellular and MTN Group
The main advantage of trading using opposite U S Cellular and MTN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U S Cellular 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.| U S Cellular vs. Telephone and Data | U S Cellular vs. Vodafone Group PLC | U S Cellular vs. Lumen Technologies | U S Cellular vs. Altice USA |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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