Correlation Between BT Group and IDT

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Can any of the company-specific risk be diversified away by investing in both BT Group and IDT 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 BT Group and IDT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BT Group Plc and IDT Corporation, you can compare the effects of market volatilities on BT Group and IDT 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 BT Group with a short position of IDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of BT Group and IDT.

Diversification Opportunities for BT Group and IDT

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between BT Group and IDT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BT Group Plc and IDT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDT Corporation and BT Group 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 BT Group Plc are associated (or correlated) with IDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDT Corporation has no effect on the direction of BT Group i.e., BT Group and IDT go up and down completely randomly.

Pair Corralation between BT Group and IDT

If you would invest  3,737  in IDT Corporation on December 29, 2023 and sell it today you would earn a total of  50.00  from holding IDT Corporation or generate 1.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

BT Group Plc  vs.  IDT Corp.

 Performance 
       Timeline  
BT Group Plc 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days BT Group Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BT Group is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
IDT Corporation 

Risk-Adjusted Performance

10 of 100

 
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OK
Compared to the overall equity markets, risk-adjusted returns on investments in IDT Corporation are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, IDT may actually be approaching a critical reversion point that can send shares even higher in April 2024.

BT Group and IDT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BT Group and IDT

The main advantage of trading using opposite BT Group and IDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BT Group position performs unexpectedly, IDT 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 IDT will offset losses from the drop in IDT's long position.
The idea behind BT Group Plc and IDT Corporation 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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