Correlation Between OTP Bank and MOL Hungarian
Can any of the company-specific risk be diversified away by investing in both OTP Bank and MOL Hungarian 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 MOL Hungarian 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 MOL Hungarian Oil, you can compare the effects of market volatilities on OTP Bank and MOL Hungarian 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 MOL Hungarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and MOL Hungarian.
Diversification Opportunities for OTP Bank and MOL Hungarian
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OTP and MOL is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and MOL Hungarian Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Hungarian Oil 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 MOL Hungarian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL Hungarian Oil has no effect on the direction of OTP Bank i.e., OTP Bank and MOL Hungarian go up and down completely randomly.
Pair Corralation between OTP Bank and MOL Hungarian
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 4.15 times more return on investment than MOL Hungarian. However, OTP Bank is 4.15 times more volatile than MOL Hungarian Oil. It trades about 0.03 of its potential returns per unit of risk. MOL Hungarian Oil is currently generating about 0.02 per unit of risk. If you would invest 1,176,324 in OTP Bank Nyrt on August 30, 2024 and sell it today you would earn a total of 82,676 from holding OTP Bank Nyrt or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.56% |
| Values | Daily Returns |
OTP Bank Nyrt vs. MOL Hungarian Oil
Performance |
| Timeline |
| OTP Bank Nyrt |
| MOL Hungarian Oil |
OTP Bank and MOL Hungarian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and MOL Hungarian
The main advantage of trading using opposite OTP Bank and MOL Hungarian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, MOL Hungarian 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 MOL Hungarian will offset losses from the drop in MOL Hungarian's long position.| OTP Bank vs. Lendinvest PLC | OTP Bank vs. Neometals | OTP Bank vs. Albion Technology General | OTP Bank vs. Jupiter Fund Management |
| MOL Hungarian vs. GoldMining | MOL Hungarian vs. Blackrock World Mining | MOL Hungarian vs. Neometals | MOL Hungarian vs. Air Products Chemicals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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