Correlation Between OTP Bank and SoftBank Group
Can any of the company-specific risk be diversified away by investing in both OTP Bank and SoftBank Group 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 SoftBank Group 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 SoftBank Group Corp, you can compare the effects of market volatilities on OTP Bank and SoftBank Group 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 SoftBank Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and SoftBank Group.
Diversification Opportunities for OTP Bank and SoftBank Group
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between OTP and SoftBank is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and SoftBank Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoftBank Group Corp 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 SoftBank Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoftBank Group Corp has no effect on the direction of OTP Bank i.e., OTP Bank and SoftBank Group go up and down completely randomly.
Pair Corralation between OTP Bank and SoftBank Group
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 4.41 times more return on investment than SoftBank Group. However, OTP Bank is 4.41 times more volatile than SoftBank Group Corp. It trades about 0.06 of its potential returns per unit of risk. SoftBank Group Corp is currently generating about 0.03 per unit of risk. If you would invest 1,259,000 in OTP Bank Nyrt on August 24, 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 Together |
| Strength | Insignificant |
| Accuracy | 68.25% |
| Values | Daily Returns |
OTP Bank Nyrt vs. SoftBank Group Corp
Performance |
| Timeline |
| OTP Bank Nyrt |
| SoftBank Group Corp |
OTP Bank and SoftBank Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and SoftBank Group
The main advantage of trading using opposite OTP Bank and SoftBank Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, SoftBank Group 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 SoftBank Group will offset losses from the drop in SoftBank Group's long position.| OTP Bank vs. Universal Health Services | OTP Bank vs. Omega Healthcare Investors | OTP Bank vs. Batm Advanced Communications | OTP Bank vs. Norman Broadbent Plc |
| SoftBank Group vs. G5 Entertainment AB | SoftBank Group vs. Grand Vision Media | SoftBank Group vs. AcadeMedia AB | SoftBank Group vs. MediaZest plc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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