Correlation Between Vodacom Group and Magyar Telekom
Can any of the company-specific risk be diversified away by investing in both Vodacom Group 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 Vodacom Group and Magyar Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vodacom Group Ltd and Magyar Telekom Plc, you can compare the effects of market volatilities on Vodacom Group 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 Vodacom Group with a short position of Magyar Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodacom Group and Magyar Telekom.
Diversification Opportunities for Vodacom Group and Magyar Telekom
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vodacom and Magyar is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Vodacom Group Ltd 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 Vodacom Group 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 Vodacom Group Ltd 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 Vodacom Group i.e., Vodacom Group and Magyar Telekom go up and down completely randomly.
Pair Corralation between Vodacom Group and Magyar Telekom
Assuming the 90 days horizon Vodacom Group Ltd is expected to under-perform the Magyar Telekom. In addition to that, Vodacom Group is 1.22 times more volatile than Magyar Telekom Plc. It trades about -0.13 of its total potential returns per unit of risk. Magyar Telekom Plc is currently generating about 0.18 per unit of volatility. If you would invest 1,447 in Magyar Telekom Plc on August 29, 2024 and sell it today you would earn a total of 120.00 from holding Magyar Telekom Plc or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vodacom Group Ltd vs. Magyar Telekom Plc
Performance |
| Timeline |
| Vodacom Group |
| Magyar Telekom Plc |
Vodacom Group and Magyar Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodacom Group and Magyar Telekom
The main advantage of trading using opposite Vodacom Group and Magyar Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodacom Group 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.| Vodacom Group vs. XL Axiata Tbk | Vodacom Group vs. Telenor ASA ADR | Vodacom Group vs. Tele2 AB | Vodacom Group vs. MTN Group Ltd |
| Magyar Telekom vs. SwissCom AG | Magyar Telekom vs. Hellenic Telecommunications Org | Magyar Telekom vs. Telefonica SA ADR | Magyar Telekom vs. Lumen Technologies |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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