Correlation Between OTP Bank and Oakley Capital
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Oakley Capital 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 Oakley Capital 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 Oakley Capital Investments, you can compare the effects of market volatilities on OTP Bank and Oakley Capital 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 Oakley Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Oakley Capital.
Diversification Opportunities for OTP Bank and Oakley Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between OTP and Oakley is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Oakley Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakley Capital Inves 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 Oakley Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakley Capital Inves has no effect on the direction of OTP Bank i.e., OTP Bank and Oakley Capital go up and down completely randomly.
Pair Corralation between OTP Bank and Oakley Capital
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 7.47 times more return on investment than Oakley Capital. However, OTP Bank is 7.47 times more volatile than Oakley Capital Investments. It trades about 0.03 of its potential returns per unit of risk. Oakley Capital Investments is currently generating about 0.03 per unit of risk. If you would invest 1,205,054 in OTP Bank Nyrt on November 28, 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 | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OTP Bank Nyrt vs. Oakley Capital Investments
Performance |
| Timeline |
| OTP Bank Nyrt |
| Oakley Capital Inves |
OTP Bank and Oakley Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Oakley Capital
The main advantage of trading using opposite OTP Bank and Oakley Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Oakley Capital 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 Oakley Capital will offset losses from the drop in Oakley Capital's long position.| OTP Bank vs. Hansa Investment | OTP Bank vs. OneSavings Bank PLC | OTP Bank vs. URU Metals | OTP Bank vs. Central Asia Metals |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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