Correlation Between Telia Company and MTN Group
Can any of the company-specific risk be diversified away by investing in both Telia Company 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 Telia Company and MTN Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telia Company AB and MTN Group Ltd, you can compare the effects of market volatilities on Telia Company 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 Telia Company with a short position of MTN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and MTN Group.
Diversification Opportunities for Telia Company and MTN Group
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telia and MTN is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and MTN Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTN Group and Telia Company 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 Telia Company AB 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 Telia Company i.e., Telia Company and MTN Group go up and down completely randomly.
Pair Corralation between Telia Company and MTN Group
If you would invest 493.00 in Telia Company AB on September 26, 2024 and sell it today you would earn a total of 0.00 from holding Telia Company AB or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 0.8% |
Values | Daily Returns |
Telia Company AB vs. MTN Group Ltd
Performance |
Timeline |
Telia Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MTN Group |
Telia Company and MTN Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Telia Company and MTN Group
The main advantage of trading using opposite Telia Company and MTN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telia Company 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.Telia Company vs. MTN Group Ltd | Telia Company vs. Vodacom Group Ltd | Telia Company vs. Telenor ASA ADR | Telia Company vs. WideOpenWest |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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