Correlation Between OTP Bank and Mulberry Group
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Mulberry Group 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 Mulberry Group 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 Mulberry Group PLC, you can compare the effects of market volatilities on OTP Bank and Mulberry Group 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 Mulberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Mulberry Group.
Diversification Opportunities for OTP Bank and Mulberry Group
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between OTP and Mulberry is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Mulberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mulberry Group PLC 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 Mulberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mulberry Group PLC has no effect on the direction of OTP Bank i.e., OTP Bank and Mulberry Group go up and down completely randomly.
Pair Corralation between OTP Bank and Mulberry Group
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 3.54 times more return on investment than Mulberry Group. However, OTP Bank is 3.54 times more volatile than Mulberry Group PLC. It trades about 0.07 of its potential returns per unit of risk. Mulberry Group PLC is currently generating about -0.15 per unit of risk. If you would invest 1,259,000 in OTP Bank Nyrt on August 26, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OTP Bank Nyrt vs. Mulberry Group PLC
Performance |
| Timeline |
| OTP Bank Nyrt |
| Mulberry Group PLC |
OTP Bank and Mulberry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Mulberry Group
The main advantage of trading using opposite OTP Bank and Mulberry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Mulberry Group 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 Mulberry Group will offset losses from the drop in Mulberry Group's long position.| OTP Bank vs. Kinnevik Investment AB | OTP Bank vs. Smithson Investment Trust | OTP Bank vs. Park Hotels Resorts | OTP Bank vs. The Investment |
| Mulberry Group vs. Toyota Motor Corp | Mulberry Group vs. SoftBank Group Corp | Mulberry Group vs. OTP Bank Nyrt | Mulberry Group vs. Las Vegas Sands |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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