Correlation Between OTP Bank and Spotify Technology
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Spotify Technology 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 Spotify Technology 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 Spotify Technology SA, you can compare the effects of market volatilities on OTP Bank and Spotify Technology 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 Spotify Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Spotify Technology.
Diversification Opportunities for OTP Bank and Spotify Technology
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between OTP and Spotify is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Spotify Technology SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spotify 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 Spotify Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spotify Technology has no effect on the direction of OTP Bank i.e., OTP Bank and Spotify Technology go up and down completely randomly.
Pair Corralation between OTP Bank and Spotify Technology
If you would invest 45,285 in Spotify Technology SA on November 4, 2024 and sell it today you would earn a total of 8,335 from holding Spotify Technology SA or generate 18.41% 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. Spotify Technology SA
Performance |
| Timeline |
| OTP Bank Nyrt |
| Spotify Technology |
OTP Bank and Spotify Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Spotify Technology
The main advantage of trading using opposite OTP Bank and Spotify Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Spotify Technology 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 Spotify Technology will offset losses from the drop in Spotify Technology's long position.| OTP Bank vs. Inspiration Healthcare Group | OTP Bank vs. Monster Beverage Corp | OTP Bank vs. Abingdon Health Plc | OTP Bank vs. STMicroelectronics NV |
| Spotify Technology vs. China Pacific Insurance | Spotify Technology vs. UNIQA Insurance Group | Spotify Technology vs. Mobius Investment Trust | Spotify Technology vs. Diversified Energy |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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