Correlation Between VTC Telecommunicatio and MHC JSC

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

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

Diversification Opportunities for VTC Telecommunicatio and MHC JSC

0.46

Correlation Coefficient

VTC Telecommunicatio  MHC JSC

Very weak diversification

The 3 months correlation between VTC and MHC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding VTC Telecommunications JSC and MHC JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MHC JSC and VTC Telecommunicatio 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 VTC Telecommunications JSC are associated (or correlated) with MHC JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MHC JSC has no effect on the direction of VTC Telecommunicatio i.e., VTC Telecommunicatio and MHC JSC go up and down completely randomly.

Pair Corralation between VTC Telecommunicatio and MHC JSC

Assuming the 90 days trading horizon VTC Telecommunicatio is expected to generate 2.47 times less return on investment than MHC JSC. In addition to that, VTC Telecommunicatio is 1.15 times more volatile than MHC JSC. It trades about 0.08 of its total potential returns per unit of risk. MHC JSC is currently generating about 0.24 per unit of volatility. If you would invest  829,000  in MHC JSC on May 16, 2025 and sell it today you would earn a total of  411,000  from holding MHC JSC or generate 49.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	80.0%
Values	Daily Returns

VTC Telecommunications JSC  vs.  MHC JSC

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 6 (%) 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.

MHC JSC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MHC JSC are ranked lower than 18 (%) 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.

Pair Trading with VTC Telecommunicatio and MHC JSC

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

The idea behind VTC Telecommunications JSC and MHC 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.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.