Correlation Between OTP Bank and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both OTP Bank and PPHE Hotel 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 PPHE Hotel 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 PPHE Hotel Group, you can compare the effects of market volatilities on OTP Bank and PPHE Hotel 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 PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and PPHE Hotel.
Diversification Opportunities for OTP Bank and PPHE Hotel
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OTP and PPHE is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel Group 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 PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of OTP Bank i.e., OTP Bank and PPHE Hotel go up and down completely randomly.
Pair Corralation between OTP Bank and PPHE Hotel
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 4.48 times more return on investment than PPHE Hotel. However, OTP Bank is 4.48 times more volatile than PPHE Hotel Group. It trades about 0.03 of its potential returns per unit of risk. PPHE Hotel Group is currently generating about 0.03 per unit of risk. If you would invest 1,205,054 in OTP Bank Nyrt on August 31, 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 | 99.74% |
| Values | Daily Returns |
OTP Bank Nyrt vs. PPHE Hotel Group
Performance |
| Timeline |
| OTP Bank Nyrt |
| PPHE Hotel Group |
OTP Bank and PPHE Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and PPHE Hotel
The main advantage of trading using opposite OTP Bank and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, PPHE Hotel 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 PPHE Hotel will offset losses from the drop in PPHE Hotel's long position.| OTP Bank vs. Bisichi Mining PLC | OTP Bank vs. Greenroc Mining PLC | OTP Bank vs. GreenX Metals | OTP Bank vs. Qurate Retail Series |
| PPHE Hotel vs. Berkshire Hathaway | PPHE Hotel vs. Hyundai Motor | PPHE Hotel vs. Samsung Electronics Co | PPHE Hotel vs. Samsung Electronics Co |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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