Correlation Between British American and OTP Bank
Can any of the company-specific risk be diversified away by investing in both British American and OTP Bank 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 British American and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and OTP Bank Nyrt, you can compare the effects of market volatilities on British American and OTP Bank 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 British American with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of British American and OTP Bank.
Diversification Opportunities for British American and OTP Bank
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between British and OTP is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and OTP Bank Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OTP Bank Nyrt and British American 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 British American Tobacco are associated (or correlated) with OTP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OTP Bank Nyrt has no effect on the direction of British American i.e., British American and OTP Bank go up and down completely randomly.
Pair Corralation between British American and OTP Bank
If you would invest 3,645 in British American Tobacco on November 3, 2024 and sell it today you would earn a total of 327.00 from holding British American Tobacco or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
British American Tobacco vs. OTP Bank Nyrt
Performance |
| Timeline |
| British American Tobacco |
| OTP Bank Nyrt |
British American and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British American and OTP Bank
The main advantage of trading using opposite British American and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British American position performs unexpectedly, OTP Bank 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 OTP Bank will offset losses from the drop in OTP Bank's long position.| British American vs. Edita Food Industries | British American vs. Jupiter Fund Management | British American vs. Leroy Seafood Group | British American vs. Applied Materials |
| OTP Bank vs. Samsung Electronics Co | OTP Bank vs. Samsung Electronics Co | OTP Bank vs. Toyota Motor Corp | OTP Bank vs. Reliance Industries Ltd |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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