Correlation Between OTP Bank and SMA Solar
Can any of the company-specific risk be diversified away by investing in both OTP Bank and SMA Solar 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 SMA Solar 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 SMA Solar Technology, you can compare the effects of market volatilities on OTP Bank and SMA Solar 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 SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and SMA Solar.
Diversification Opportunities for OTP Bank and SMA Solar
Good diversification
The 3 months correlation between OTP and SMA is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and SMA Solar Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMA Solar Technology 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 SMA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMA Solar Technology has no effect on the direction of OTP Bank i.e., OTP Bank and SMA Solar go up and down completely randomly.
Pair Corralation between OTP Bank and SMA Solar
If you would invest 1,395 in SMA Solar Technology on October 25, 2024 and sell it today you would earn a total of 44.00 from holding SMA Solar Technology or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OTP Bank Nyrt vs. SMA Solar Technology
Performance |
| Timeline |
| OTP Bank Nyrt |
| SMA Solar Technology |
OTP Bank and SMA Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and SMA Solar
The main advantage of trading using opposite OTP Bank and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, SMA Solar 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 SMA Solar will offset losses from the drop in SMA Solar's long position.| OTP Bank vs. Toyota Motor Corp | OTP Bank vs. SoftBank Group Corp | OTP Bank vs. ONEOK Inc | OTP Bank vs. Public Service Enterprise |
| SMA Solar vs. Toyota Motor Corp | SMA Solar vs. SoftBank Group Corp | SMA Solar vs. OTP Bank Nyrt | SMA Solar vs. ONEOK Inc |
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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