Correlation Between MHC JSC and VTC Telecommunicatio

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

By analyzing existing cross correlation between MHC JSC and VTC Telecommunications JSC, you can compare the effects of market volatilities on MHC JSC and VTC Telecommunicatio 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 MHC JSC with a short position of VTC Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of MHC JSC and VTC Telecommunicatio.

Diversification Opportunities for MHC JSC and VTC Telecommunicatio

0.53

Correlation Coefficient

MHC JSC  VTC Telecommunicatio

Very weak diversification

The 3 months correlation between MHC and VTC is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding MHC JSC and VTC Telecommunications JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTC Telecommunications and MHC JSC 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 MHC JSC are associated (or correlated) with VTC Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VTC Telecommunications has no effect on the direction of MHC JSC i.e., MHC JSC and VTC Telecommunicatio go up and down completely randomly.

Pair Corralation between MHC JSC and VTC Telecommunicatio

Assuming the 90 days trading horizon MHC JSC is expected to generate 0.89 times more return on investment than VTC Telecommunicatio. However, MHC JSC is 1.12 times less risky than VTC Telecommunicatio. It trades about 0.29 of its potential returns per unit of risk. VTC Telecommunications JSC is currently generating about 0.06 per unit of risk. If you would invest  806,000  in MHC JSC on May 18, 2025 and sell it today you would earn a total of  519,000  from holding MHC JSC or generate 64.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	81.54%
Values	Daily Returns

MHC JSC  vs.  VTC Telecommunications JSC

MHC JSC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MHC JSC are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, MHC JSC displayed solid returns over the last few months and may actually be approaching a breakup point.

VTC Telecommunications

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in VTC Telecommunications JSC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, VTC Telecommunicatio displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MHC JSC and VTC Telecommunicatio

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

The idea behind MHC JSC and VTC Telecommunications JSC 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.