Correlation Between OTP Bank and Inspiration Healthcare
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Inspiration Healthcare 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 Inspiration Healthcare 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 Inspiration Healthcare Group, you can compare the effects of market volatilities on OTP Bank and Inspiration Healthcare 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 Inspiration Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Inspiration Healthcare.
Diversification Opportunities for OTP Bank and Inspiration Healthcare
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between OTP and Inspiration is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Inspiration Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspiration Healthcare 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 Inspiration Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspiration Healthcare has no effect on the direction of OTP Bank i.e., OTP Bank and Inspiration Healthcare go up and down completely randomly.
Pair Corralation between OTP Bank and Inspiration Healthcare
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 1.55 times more return on investment than Inspiration Healthcare. However, OTP Bank is 1.55 times more volatile than Inspiration Healthcare Group. It trades about 0.03 of its potential returns per unit of risk. Inspiration Healthcare Group is currently generating about -0.04 per unit of risk. If you would invest 1,205,054 in OTP Bank Nyrt on September 2, 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. Inspiration Healthcare Group
Performance |
| Timeline |
| OTP Bank Nyrt |
| Inspiration Healthcare |
OTP Bank and Inspiration Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Inspiration Healthcare
The main advantage of trading using opposite OTP Bank and Inspiration Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Inspiration Healthcare 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 Inspiration Healthcare will offset losses from the drop in Inspiration Healthcare's long position.| OTP Bank vs. Uniper SE | OTP Bank vs. Mulberry Group PLC | OTP Bank vs. London Security Plc | OTP Bank vs. Triad Group PLC |
| Inspiration Healthcare vs. HCA Healthcare | Inspiration Healthcare vs. Optima Health plc | Inspiration Healthcare vs. Tyson Foods Cl | Inspiration Healthcare vs. Ebro Foods |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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