Correlation Between OTP Bank and Ondine Biomedical
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Ondine Biomedical 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 Ondine Biomedical 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 Ondine Biomedical, you can compare the effects of market volatilities on OTP Bank and Ondine Biomedical 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 Ondine Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Ondine Biomedical.
Diversification Opportunities for OTP Bank and Ondine Biomedical
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between OTP and Ondine is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Ondine Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ondine Biomedical 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 Ondine Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ondine Biomedical has no effect on the direction of OTP Bank i.e., OTP Bank and Ondine Biomedical go up and down completely randomly.
Pair Corralation between OTP Bank and Ondine Biomedical
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 1.3 times more return on investment than Ondine Biomedical. However, OTP Bank is 1.3 times more volatile than Ondine Biomedical. It trades about 0.03 of its potential returns per unit of risk. Ondine Biomedical is currently generating about -0.01 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. Ondine Biomedical
Performance |
| Timeline |
| OTP Bank Nyrt |
| Ondine Biomedical |
OTP Bank and Ondine Biomedical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Ondine Biomedical
The main advantage of trading using opposite OTP Bank and Ondine Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Ondine Biomedical 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 Ondine Biomedical will offset losses from the drop in Ondine Biomedical'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 |
| Ondine Biomedical vs. Samsung Electronics Co | Ondine Biomedical vs. Samsung Electronics Co | Ondine Biomedical vs. Hyundai Motor | Ondine Biomedical vs. Toyota Motor Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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