Correlation Between OTP Bank and American Homes
Can any of the company-specific risk be diversified away by investing in both OTP Bank and American Homes 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 OTP Bank and American Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OTP Bank Nyrt and American Homes 4, you can compare the effects of market volatilities on OTP Bank and American Homes 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 OTP Bank with a short position of American Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and American Homes.
Diversification Opportunities for OTP Bank and American Homes
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between OTP and American is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and American Homes 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Homes 4 and OTP Bank 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 OTP Bank Nyrt are associated (or correlated) with American Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Homes 4 has no effect on the direction of OTP Bank i.e., OTP Bank and American Homes go up and down completely randomly.
Pair Corralation between OTP Bank and American Homes
If you would invest 1,259,000 in OTP Bank Nyrt on November 4, 2024 and sell it today you would earn a total of 0.00 from holding OTP Bank Nyrt or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
OTP Bank Nyrt vs. American Homes 4
Performance |
| Timeline |
| OTP Bank Nyrt |
| American Homes 4 |
OTP Bank and American Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and American Homes
The main advantage of trading using opposite OTP Bank and American Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, American Homes 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 American Homes will offset losses from the drop in American Homes' long position.| OTP Bank vs. Inspiration Healthcare Group | OTP Bank vs. Monster Beverage Corp | OTP Bank vs. Abingdon Health Plc | OTP Bank vs. STMicroelectronics NV |
| American Homes vs. Bytes Technology | American Homes vs. DXC Technology Co | American Homes vs. Litigation Capital Management | American Homes vs. Allianz Technology Trust |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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