Correlation Between Kinnevik Investment and OTP Bank
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment 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 Kinnevik Investment and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinnevik Investment AB and OTP Bank Nyrt, you can compare the effects of market volatilities on Kinnevik Investment 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 Kinnevik Investment with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and OTP Bank.
Diversification Opportunities for Kinnevik Investment and OTP Bank
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinnevik and OTP is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment 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 Kinnevik Investment 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 Kinnevik Investment 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 Kinnevik Investment i.e., Kinnevik Investment and OTP Bank go up and down completely randomly.
Pair Corralation between Kinnevik Investment and OTP Bank
Assuming the 90 days trading horizon Kinnevik Investment is expected to generate 6.18 times less return on investment than OTP Bank. But when comparing it to its historical volatility, Kinnevik Investment AB is 6.9 times less risky than OTP Bank. It trades about 0.07 of its potential returns per unit of risk. OTP Bank Nyrt is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,259,000 in OTP Bank Nyrt on August 26, 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 |
Kinnevik Investment AB vs. OTP Bank Nyrt
Performance |
| Timeline |
| Kinnevik Investment |
| OTP Bank Nyrt |
Kinnevik Investment and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and OTP Bank
The main advantage of trading using opposite Kinnevik Investment and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment 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.| Kinnevik Investment vs. Samsung Electronics Co | Kinnevik Investment vs. Samsung Electronics Co | Kinnevik Investment vs. Hyundai Motor | Kinnevik Investment vs. Toyota Motor Corp |
| OTP Bank vs. Kinnevik Investment AB | OTP Bank vs. Smithson Investment Trust | OTP Bank vs. Park Hotels Resorts | OTP Bank vs. The Investment |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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