Correlation Between Telecom Argentina and Millicom International

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

By analyzing existing cross correlation between Telecom Argentina SA and Millicom International Cellular, you can compare the effects of market volatilities on Telecom Argentina and Millicom International 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 Telecom Argentina with a short position of Millicom International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and Millicom International.

Diversification Opportunities for Telecom Argentina and Millicom International

-0.47

Correlation Coefficient

Telecom Argentina  Millicom International

Very good diversification

The 3 months correlation between Telecom and Millicom is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina SA and Millicom International Cellula in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millicom International and Telecom Argentina 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 Telecom Argentina SA are associated (or correlated) with Millicom International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millicom International has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and Millicom International go up and down completely randomly.

Pair Corralation between Telecom Argentina and Millicom International

Considering the 90-day investment horizon Telecom Argentina is expected to generate 24.01 times less return on investment than Millicom International. In addition to that, Telecom Argentina is 1.76 times more volatile than Millicom International Cellular. It trades about 0.0 of its total potential returns per unit of risk. Millicom International Cellular is currently generating about 0.17 per unit of volatility. If you would invest  3,386  in Millicom International Cellular on April 30, 2025 and sell it today you would earn a total of  562.00  from holding Millicom International Cellular or generate 16.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Telecom Argentina SA  vs.  Millicom International Cellula

Telecom Argentina

Risk-Adjusted Performance

Very Weak

Over the last 90 days Telecom Argentina SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Telecom Argentina is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Millicom International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Millicom International Cellular are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Millicom International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telecom Argentina and Millicom International

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

The idea behind Telecom Argentina SA and Millicom International Cellular 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.