Correlation Between TIM Participacoes and Millicom International
Can any of the company-specific risk be diversified away by investing in both TIM Participacoes 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 TIM Participacoes and Millicom International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TIM Participacoes SA and Millicom International Cellular, you can compare the effects of market volatilities on TIM Participacoes 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 TIM Participacoes with a short position of Millicom International. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIM Participacoes and Millicom International.
Diversification Opportunities for TIM Participacoes and Millicom International
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TIM and Millicom is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding TIM Participacoes 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 TIM Participacoes 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 TIM Participacoes 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 TIM Participacoes i.e., TIM Participacoes and Millicom International go up and down completely randomly.
Pair Corralation between TIM Participacoes and Millicom International
Given the investment horizon of 90 days TIM Participacoes is expected to generate 1.31 times less return on investment than Millicom International. But when comparing it to its historical volatility, TIM Participacoes SA is 1.18 times less risky than Millicom International. It trades about 0.15 of its potential returns per unit of risk. Millicom International Cellular is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,294 in Millicom International Cellular on August 12, 2025 and sell it today you would earn a total of 1,454 from holding Millicom International Cellular or generate 44.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TIM Participacoes SA vs. Millicom International Cellula
Performance |
| Timeline |
| TIM Participacoes |
| Millicom International |
TIM Participacoes and Millicom International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TIM Participacoes and Millicom International
The main advantage of trading using opposite TIM Participacoes and Millicom International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIM Participacoes 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.| TIM Participacoes vs. KT Corporation | TIM Participacoes vs. Liberty Broadband Srs | TIM Participacoes vs. SK Telecom Co | TIM Participacoes vs. Frontier Communications Parent |
| Millicom International vs. KT Corporation | Millicom International vs. Telkom Indonesia Tbk | Millicom International vs. SK Telecom Co | Millicom International vs. PLDT Inc ADR |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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