Correlation Between OTP Bank and Ecofin Global
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Ecofin Global 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 Ecofin Global 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 Ecofin Global Utilities, you can compare the effects of market volatilities on OTP Bank and Ecofin Global 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 Ecofin Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Ecofin Global.
Diversification Opportunities for OTP Bank and Ecofin Global
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between OTP and Ecofin is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Ecofin Global Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofin Global Utilities 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 Ecofin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofin Global Utilities has no effect on the direction of OTP Bank i.e., OTP Bank and Ecofin Global go up and down completely randomly.
Pair Corralation between OTP Bank and Ecofin Global
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 11.01 times more return on investment than Ecofin Global. However, OTP Bank is 11.01 times more volatile than Ecofin Global Utilities. It trades about 0.05 of its potential returns per unit of risk. Ecofin Global Utilities is currently generating about 0.08 per unit of risk. If you would invest 1,205,054 in OTP Bank Nyrt on September 3, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OTP Bank Nyrt vs. Ecofin Global Utilities
Performance |
| Timeline |
| OTP Bank Nyrt |
| Ecofin Global Utilities |
OTP Bank and Ecofin Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Ecofin Global
The main advantage of trading using opposite OTP Bank and Ecofin Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Ecofin Global 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 Ecofin Global will offset losses from the drop in Ecofin Global's long position.| OTP Bank vs. AMG Advanced Metallurgical | OTP Bank vs. Panther Metals PLC | OTP Bank vs. G5 Entertainment AB | OTP Bank vs. Everyman Media Group |
| Ecofin Global vs. Zoom Video Communications | Ecofin Global vs. Zanaga Iron Ore | Ecofin Global vs. Batm Advanced Communications | Ecofin Global vs. Qurate Retail Series |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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