Correlation Between OTP Bank and Las Vegas
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Las Vegas 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 Las Vegas 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 Las Vegas Sands, you can compare the effects of market volatilities on OTP Bank and Las Vegas 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 Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Las Vegas.
Diversification Opportunities for OTP Bank and Las Vegas
Significant diversification
The 3 months correlation between OTP and Las is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Las Vegas Sands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Vegas Sands 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 Las Vegas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Vegas Sands has no effect on the direction of OTP Bank i.e., OTP Bank and Las Vegas go up and down completely randomly.
Pair Corralation between OTP Bank and Las Vegas
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 3.13 times more return on investment than Las Vegas. However, OTP Bank is 3.13 times more volatile than Las Vegas Sands. It trades about 0.03 of its potential returns per unit of risk. Las Vegas Sands is currently generating about -0.01 per unit of risk. If you would invest 1,205,054 in OTP Bank Nyrt on August 27, 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 Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
OTP Bank Nyrt vs. Las Vegas Sands
Performance |
| Timeline |
| OTP Bank Nyrt |
| Las Vegas Sands |
OTP Bank and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Las Vegas
The main advantage of trading using opposite OTP Bank and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Las Vegas 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 Las Vegas will offset losses from the drop in Las Vegas' 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 |
| Las Vegas vs. Samsung Electronics Co | Las Vegas vs. Samsung Electronics Co | Las Vegas vs. Hyundai Motor | Las Vegas 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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