Correlation Between OTP Bank and Universal Health
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Universal Health 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 Universal Health 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 Universal Health Services, you can compare the effects of market volatilities on OTP Bank and Universal Health 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 Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Universal Health.
Diversification Opportunities for OTP Bank and Universal Health
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between OTP and Universal is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Universal Health Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Services 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 Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Services has no effect on the direction of OTP Bank i.e., OTP Bank and Universal Health go up and down completely randomly.
Pair Corralation between OTP Bank and Universal Health
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 5.03 times more return on investment than Universal Health. However, OTP Bank is 5.03 times more volatile than Universal Health Services. It trades about 0.04 of its potential returns per unit of risk. Universal Health Services is currently generating about 0.07 per unit of risk. If you would invest 1,205,054 in OTP Bank Nyrt on August 28, 2024 and sell it today you would earn a total of 53,946 from holding OTP Bank Nyrt or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.69% |
| Values | Daily Returns |
OTP Bank Nyrt vs. Universal Health Services
Performance |
| Timeline |
| OTP Bank Nyrt |
| Universal Health Services |
OTP Bank and Universal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Universal Health
The main advantage of trading using opposite OTP Bank and Universal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Universal Health 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 Universal Health will offset losses from the drop in Universal Health's long position.| OTP Bank vs. Aeorema Communications Plc | OTP Bank vs. Playtech Plc | OTP Bank vs. Cairo Communication SpA | OTP Bank vs. Tyson Foods Cl |
| Universal Health vs. Samsung Electronics Co | Universal Health vs. Samsung Electronics Co | Universal Health vs. Hyundai Motor | Universal Health vs. Toyota Motor Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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