Correlation Between OTP Bank and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Playtech Plc 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 Playtech Plc 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 Playtech Plc, you can compare the effects of market volatilities on OTP Bank and Playtech Plc 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 Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Playtech Plc.
Diversification Opportunities for OTP Bank and Playtech Plc
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between OTP and Playtech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Playtech Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech 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 Playtech Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtech Plc has no effect on the direction of OTP Bank i.e., OTP Bank and Playtech Plc go up and down completely randomly.
Pair Corralation between OTP Bank and Playtech Plc
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 24.16 times more return on investment than Playtech Plc. However, OTP Bank is 24.16 times more volatile than Playtech Plc. It trades about 0.05 of its potential returns per unit of risk. Playtech Plc is currently generating about 0.05 per unit of risk. If you would invest 1,895,000 in OTP Bank Nyrt on September 13, 2024 and sell it today you would lose (636,000) from holding OTP Bank Nyrt or give up 33.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OTP Bank Nyrt vs. Playtech Plc
Performance |
| Timeline |
| OTP Bank Nyrt |
| Playtech Plc |
OTP Bank and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Playtech Plc
The main advantage of trading using opposite OTP Bank and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Playtech Plc 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 Playtech Plc will offset losses from the drop in Playtech Plc's long position.| OTP Bank vs. Automatic Data Processing | OTP Bank vs. Flow Traders NV | OTP Bank vs. Tatton Asset Management | OTP Bank vs. Lowland Investment Co |
| Playtech Plc vs. Berkshire Hathaway | Playtech Plc vs. Hyundai Motor | Playtech Plc vs. Samsung Electronics Co | Playtech Plc 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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