Correlation Between Cardano and TELEKOM NETWORK

Can any of the company-specific risk be diversified away by investing in both Cardano and TELEKOM NETWORK 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 Cardano and TELEKOM NETWORK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cardano and TELEKOM NETWORK MALAWI, you can compare the effects of market volatilities on Cardano and TELEKOM NETWORK 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 Cardano with a short position of TELEKOM NETWORK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and TELEKOM NETWORK.

Diversification Opportunities for Cardano and TELEKOM NETWORK

-0.18

Correlation Coefficient

Cardano  TELEKOM NETWORK

Good diversification

The 3 months correlation between Cardano and TELEKOM is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and TELEKOM NETWORK MALAWI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELEKOM NETWORK MALAWI and Cardano 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 Cardano are associated (or correlated) with TELEKOM NETWORK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELEKOM NETWORK MALAWI has no effect on the direction of Cardano i.e., Cardano and TELEKOM NETWORK go up and down completely randomly.

Pair Corralation between Cardano and TELEKOM NETWORK

Assuming the 90 days trading horizon Cardano is expected to under-perform the TELEKOM NETWORK. In addition to that, Cardano is 1.58 times more volatile than TELEKOM NETWORK MALAWI. It trades about -0.02 of its total potential returns per unit of risk. TELEKOM NETWORK MALAWI is currently generating about 0.02 per unit of volatility. If you would invest  2,549  in TELEKOM NETWORK MALAWI on December 22, 2024 and sell it today you would lose (49.00) from holding TELEKOM NETWORK MALAWI or give up 1.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Cardano  vs.  TELEKOM NETWORK MALAWI

Cardano

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardano has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Cardano shareholders.

TELEKOM NETWORK MALAWI

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TELEKOM NETWORK MALAWI are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, TELEKOM NETWORK is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cardano and TELEKOM NETWORK

The main advantage of trading using opposite Cardano and TELEKOM NETWORK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, TELEKOM NETWORK 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 TELEKOM NETWORK will offset losses from the drop in TELEKOM NETWORK's long position.

The idea behind Cardano and TELEKOM NETWORK MALAWI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.