Correlation Between Freeport McMoRan and OTP Bank
Can any of the company-specific risk be diversified away by investing in both Freeport McMoRan 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 Freeport McMoRan and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freeport McMoRan and OTP Bank Nyrt, you can compare the effects of market volatilities on Freeport McMoRan 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 Freeport McMoRan with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freeport McMoRan and OTP Bank.
Diversification Opportunities for Freeport McMoRan and OTP Bank
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Freeport and OTP is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Freeport McMoRan 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 Freeport McMoRan 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 Freeport McMoRan 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 Freeport McMoRan i.e., Freeport McMoRan and OTP Bank go up and down completely randomly.
Pair Corralation between Freeport McMoRan and OTP Bank
If you would invest 1,259,000 in OTP Bank Nyrt on September 23, 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 |
Freeport McMoRan vs. OTP Bank Nyrt
Performance |
| Timeline |
| Freeport McMoRan |
| OTP Bank Nyrt |
Freeport McMoRan and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freeport McMoRan and OTP Bank
The main advantage of trading using opposite Freeport McMoRan and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freeport McMoRan 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.| Freeport McMoRan vs. Uniper SE | Freeport McMoRan vs. Mulberry Group PLC | Freeport McMoRan vs. London Security Plc | Freeport McMoRan vs. Triad Group PLC |
| OTP Bank vs. Hilton Food Group | OTP Bank vs. Veolia Environnement VE | OTP Bank vs. Charter Communications Cl | OTP Bank vs. Ironveld 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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