Correlation Between VEON and Telecom Argentina
Can any of the company-specific risk be diversified away by investing in both VEON and Telecom Argentina 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 VEON and Telecom Argentina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VEON and Telecom Argentina SA, you can compare the effects of market volatilities on VEON and Telecom Argentina 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 VEON with a short position of Telecom Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of VEON and Telecom Argentina.
Diversification Opportunities for VEON and Telecom Argentina
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VEON and Telecom is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding VEON and Telecom Argentina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina and VEON 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 VEON are associated (or correlated) with Telecom Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Argentina has no effect on the direction of VEON i.e., VEON and Telecom Argentina go up and down completely randomly.
Pair Corralation between VEON and Telecom Argentina
Given the investment horizon of 90 days VEON is expected to generate 4.24 times less return on investment than Telecom Argentina. But when comparing it to its historical volatility, VEON is 1.49 times less risky than Telecom Argentina. It trades about 0.11 of its potential returns per unit of risk. Telecom Argentina SA is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 690.00 in Telecom Argentina SA on August 26, 2024 and sell it today you would earn a total of 630.00 from holding Telecom Argentina SA or generate 91.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VEON vs. Telecom Argentina SA
Performance |
| Timeline |
| VEON |
| Telecom Argentina |
VEON and Telecom Argentina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VEON and Telecom Argentina
The main advantage of trading using opposite VEON and Telecom Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VEON position performs unexpectedly, Telecom Argentina 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 Telecom Argentina will offset losses from the drop in Telecom Argentina's long position.| VEON vs. Telecom Argentina SA | VEON vs. Telkom Indonesia Tbk | VEON vs. PLDT Inc ADR | VEON vs. Telefonica Brasil SA |
| Telecom Argentina vs. Liberty Broadband Srs | Telecom Argentina vs. Ribbon Communications | Telecom Argentina vs. Liberty Broadband Srs | Telecom Argentina vs. Shenandoah Telecommunications Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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