Correlation Between OTP Bank and Volkswagen
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Volkswagen 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 Volkswagen 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 Volkswagen AG Non Vtg, you can compare the effects of market volatilities on OTP Bank and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Volkswagen.
Diversification Opportunities for OTP Bank and Volkswagen
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between OTP and Volkswagen is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Volkswagen AG Non Vtg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG Non 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG Non has no effect on the direction of OTP Bank i.e., OTP Bank and Volkswagen go up and down completely randomly.
Pair Corralation between OTP Bank and Volkswagen
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 11.69 times more return on investment than Volkswagen. However, OTP Bank is 11.69 times more volatile than Volkswagen AG Non Vtg. It trades about 0.1 of its potential returns per unit of risk. Volkswagen AG Non Vtg is currently generating about -0.24 per unit of risk. If you would invest 1,259,000 in OTP Bank Nyrt on August 28, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OTP Bank Nyrt vs. Volkswagen AG Non Vtg
Performance |
| Timeline |
| OTP Bank Nyrt |
| Volkswagen AG Non |
OTP Bank and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Volkswagen
The main advantage of trading using opposite OTP Bank and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| OTP Bank vs. Sparebank 1 SR | OTP Bank vs. Erste Group Bank | OTP Bank vs. AfriTin Mining | OTP Bank vs. OneSavings Bank PLC |
| Volkswagen vs. Toyota Motor Corp | Volkswagen vs. OTP Bank Nyrt | Volkswagen vs. Yum Brands | Volkswagen vs. Cognizant Technology Solutions |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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