Correlation Between OTP Bank and Check Point
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Check Point 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 Check Point 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 Check Point Software, you can compare the effects of market volatilities on OTP Bank and Check Point 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 Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Check Point.
Diversification Opportunities for OTP Bank and Check Point
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between OTP and Check is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software 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 Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of OTP Bank i.e., OTP Bank and Check Point go up and down completely randomly.
Pair Corralation between OTP Bank and Check Point
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 4.87 times more return on investment than Check Point. However, OTP Bank is 4.87 times more volatile than Check Point Software. It trades about 0.07 of its potential returns per unit of risk. Check Point Software is currently generating about -0.16 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 | 95.65% |
| Values | Daily Returns |
OTP Bank Nyrt vs. Check Point Software
Performance |
| Timeline |
| OTP Bank Nyrt |
| Check Point Software |
OTP Bank and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Check Point
The main advantage of trading using opposite OTP Bank and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Check Point 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 Check Point will offset losses from the drop in Check Point'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 |
| Check Point vs. Toyota Motor Corp | Check Point vs. SoftBank Group Corp | Check Point vs. OTP Bank Nyrt | Check Point vs. Yum Brands |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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