Correlation Between OTP Bank and Paccar
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Paccar 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 Paccar 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 Paccar Inc, you can compare the effects of market volatilities on OTP Bank and Paccar 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 Paccar. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Paccar.
Diversification Opportunities for OTP Bank and Paccar
Average diversification
The 3 months correlation between OTP and Paccar is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Paccar Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paccar Inc 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 Paccar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paccar Inc has no effect on the direction of OTP Bank i.e., OTP Bank and Paccar go up and down completely randomly.
Pair Corralation between OTP Bank and Paccar
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 3.82 times more return on investment than Paccar. However, OTP Bank is 3.82 times more volatile than Paccar Inc. It trades about 0.03 of its potential returns per unit of risk. Paccar Inc is currently generating about 0.09 per unit of risk. If you would invest 1,176,324 in OTP Bank Nyrt on August 31, 2024 and sell it today you would earn a total of 82,676 from holding OTP Bank Nyrt or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
OTP Bank Nyrt vs. Paccar Inc
Performance |
| Timeline |
| OTP Bank Nyrt |
| Paccar Inc |
OTP Bank and Paccar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Paccar
The main advantage of trading using opposite OTP Bank and Paccar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Paccar 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 Paccar will offset losses from the drop in Paccar's long position.| OTP Bank vs. Bisichi Mining PLC | OTP Bank vs. Greenroc Mining PLC | OTP Bank vs. GreenX Metals | OTP Bank vs. Qurate Retail Series |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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