Correlation Between OTP Bank and United Utilities
Can any of the company-specific risk be diversified away by investing in both OTP Bank and United Utilities 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 United Utilities 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 United Utilities Group, you can compare the effects of market volatilities on OTP Bank and United Utilities 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 United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and United Utilities.
Diversification Opportunities for OTP Bank and United Utilities
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between OTP and United is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities 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 United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of OTP Bank i.e., OTP Bank and United Utilities go up and down completely randomly.
Pair Corralation between OTP Bank and United Utilities
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 13.0 times more return on investment than United Utilities. However, OTP Bank is 13.0 times more volatile than United Utilities Group. It trades about 0.07 of its potential returns per unit of risk. United Utilities Group is currently generating about 0.17 per unit of risk. If you would invest 1,259,000 in OTP Bank Nyrt on September 14, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OTP Bank Nyrt vs. United Utilities Group
Performance |
| Timeline |
| OTP Bank Nyrt |
| United Utilities |
OTP Bank and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and United Utilities
The main advantage of trading using opposite OTP Bank and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' long position.| OTP Bank vs. Odyssean Investment Trust | OTP Bank vs. Smithson Investment Trust | OTP Bank vs. Bankers Investment Trust | OTP Bank vs. Aurora Investment Trust |
| United Utilities vs. Silvercorp Metals | United Utilities vs. BW Offshore | United Utilities vs. Liontrust Asset Management | United Utilities vs. Hochschild Mining plc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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