Correlation Between ANGLO ASIAN and OTP Bank
Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN 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 ANGLO ASIAN and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGLO ASIAN MINING and OTP Bank Nyrt, you can compare the effects of market volatilities on ANGLO ASIAN 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 ANGLO ASIAN with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and OTP Bank.
Diversification Opportunities for ANGLO ASIAN and OTP Bank
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ANGLO and OTP is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING 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 ANGLO ASIAN 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 ANGLO ASIAN MINING 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 ANGLO ASIAN i.e., ANGLO ASIAN and OTP Bank go up and down completely randomly.
Pair Corralation between ANGLO ASIAN and OTP Bank
Assuming the 90 days trading horizon ANGLO ASIAN is expected to generate 2.29 times less return on investment than OTP Bank. In addition to that, ANGLO ASIAN is 1.27 times more volatile than OTP Bank Nyrt. It trades about 0.08 of its total potential returns per unit of risk. OTP Bank Nyrt is currently generating about 0.23 per unit of volatility. If you would invest 5,082 in OTP Bank Nyrt on October 30, 2024 and sell it today you would earn a total of 774.00 from holding OTP Bank Nyrt or generate 15.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGLO ASIAN MINING vs. OTP Bank Nyrt
Performance |
| Timeline |
| ANGLO ASIAN MINING |
| OTP Bank Nyrt |
ANGLO ASIAN and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGLO ASIAN and OTP Bank
The main advantage of trading using opposite ANGLO ASIAN and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLO ASIAN 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.| ANGLO ASIAN vs. Canadian Utilities Limited | ANGLO ASIAN vs. The Boston Beer | ANGLO ASIAN vs. Algonquin Power Utilities | ANGLO ASIAN vs. MOLSON RS BEVERAGE |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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