Correlation Between Prosafe SE and OTP Bank
Can any of the company-specific risk be diversified away by investing in both Prosafe SE 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 Prosafe SE and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosafe SE and OTP Bank Nyrt, you can compare the effects of market volatilities on Prosafe SE 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 Prosafe SE with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosafe SE and OTP Bank.
Diversification Opportunities for Prosafe SE and OTP Bank
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prosafe and OTP is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Prosafe SE 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 Prosafe SE 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 Prosafe SE 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 Prosafe SE i.e., Prosafe SE and OTP Bank go up and down completely randomly.
Pair Corralation between Prosafe SE and OTP Bank
Assuming the 90 days horizon Prosafe SE is expected to generate 12.45 times more return on investment than OTP Bank. However, Prosafe SE is 12.45 times more volatile than OTP Bank Nyrt. It trades about 0.01 of its potential returns per unit of risk. OTP Bank Nyrt is currently generating about -0.07 per unit of risk. If you would invest 74.00 in Prosafe SE on October 11, 2024 and sell it today you would lose (17.00) from holding Prosafe SE or give up 22.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosafe SE vs. OTP Bank Nyrt
Performance |
| Timeline |
| Prosafe SE |
| OTP Bank Nyrt |
Prosafe SE and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosafe SE and OTP Bank
The main advantage of trading using opposite Prosafe SE and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosafe SE 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.| Prosafe SE vs. ecotel communication ag | Prosafe SE vs. Goosehead Insurance | Prosafe SE vs. Vienna Insurance Group | Prosafe SE vs. T Mobile |
| OTP Bank vs. OBSERVE MEDICAL ASA | OTP Bank vs. Scientific Games | OTP Bank vs. Genertec Universal Medical | OTP Bank vs. FRACTAL GAMING GROUP |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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