Correlation Between G5 Entertainment and OTP Bank
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and OTP Bank 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 G5 Entertainment and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G5 Entertainment AB and OTP Bank Nyrt, you can compare the effects of market volatilities on G5 Entertainment and OTP Bank 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 G5 Entertainment with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and OTP Bank.
Diversification Opportunities for G5 Entertainment and OTP Bank
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 0QUS and OTP is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB and OTP Bank Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OTP Bank Nyrt and G5 Entertainment 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 G5 Entertainment AB are associated (or correlated) with OTP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OTP Bank Nyrt has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and OTP Bank go up and down completely randomly.
Pair Corralation between G5 Entertainment and OTP Bank
Assuming the 90 days trading horizon G5 Entertainment is expected to generate 6.33 times less return on investment than OTP Bank. But when comparing it to its historical volatility, G5 Entertainment AB is 8.03 times less risky than OTP Bank. It trades about 0.13 of its potential returns per unit of risk. OTP Bank Nyrt is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,259,000 in OTP Bank Nyrt on September 4, 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G5 Entertainment AB vs. OTP Bank Nyrt
Performance |
| Timeline |
| G5 Entertainment |
| OTP Bank Nyrt |
G5 Entertainment and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and OTP Bank
The main advantage of trading using opposite G5 Entertainment and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, OTP Bank 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 OTP Bank will offset losses from the drop in OTP Bank's long position.| G5 Entertainment vs. United States Steel | G5 Entertainment vs. Gaztransport et Technigaz | G5 Entertainment vs. Baker Steel Resources | G5 Entertainment vs. AMG Advanced Metallurgical |
| OTP Bank vs. Aeorema Communications Plc | OTP Bank vs. Elmos Semiconductor SE | OTP Bank vs. Charter Communications Cl | OTP Bank vs. Cairo Communication SpA |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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