Correlation Between Alfa Financial and OTP Bank
Can any of the company-specific risk be diversified away by investing in both Alfa Financial 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 Alfa Financial and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and OTP Bank Nyrt, you can compare the effects of market volatilities on Alfa Financial 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 Alfa Financial with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and OTP Bank.
Diversification Opportunities for Alfa Financial and OTP Bank
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alfa and OTP is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software 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 Alfa Financial 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 Alfa Financial Software 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 Alfa Financial i.e., Alfa Financial and OTP Bank go up and down completely randomly.
Pair Corralation between Alfa Financial and OTP Bank
Assuming the 90 days trading horizon Alfa Financial Software is expected to under-perform the OTP Bank. But the stock apears to be less risky and, when comparing its historical volatility, Alfa Financial Software is 1.35 times less risky than OTP Bank. The stock trades about -0.34 of its potential returns per unit of risk. The OTP Bank Nyrt is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,308 in OTP Bank Nyrt on October 16, 2024 and sell it today you would earn a total of 184.00 from holding OTP Bank Nyrt or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. OTP Bank Nyrt
Performance |
| Timeline |
| Alfa Financial Software |
| OTP Bank Nyrt |
Alfa Financial and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and OTP Bank
The main advantage of trading using opposite Alfa Financial and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial 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.| Alfa Financial vs. Iridium Communications | Alfa Financial vs. ecotel communication ag | Alfa Financial vs. Cairo Communication SpA | Alfa Financial vs. Chengdu PUTIAN Telecommunications |
| OTP Bank vs. Monument Mining Limited | OTP Bank vs. ANGLO ASIAN MINING | OTP Bank vs. Endeavour Mining PLC | OTP Bank vs. Air Lease |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |