Correlation Between Appeninn Nyrt and OTP Bank
Can any of the company-specific risk be diversified away by investing in both Appeninn Nyrt 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 Appeninn Nyrt and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appeninn Nyrt and OTP Bank Nyrt, you can compare the effects of market volatilities on Appeninn Nyrt 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 Appeninn Nyrt with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appeninn Nyrt and OTP Bank.
Diversification Opportunities for Appeninn Nyrt and OTP Bank
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Appeninn and OTP is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Appeninn Nyrt 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 Appeninn Nyrt 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 Appeninn Nyrt 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 Appeninn Nyrt i.e., Appeninn Nyrt and OTP Bank go up and down completely randomly.
Pair Corralation between Appeninn Nyrt and OTP Bank
Assuming the 90 days trading horizon Appeninn Nyrt is expected to generate 1.38 times more return on investment than OTP Bank. However, Appeninn Nyrt is 1.38 times more volatile than OTP Bank Nyrt. It trades about 0.17 of its potential returns per unit of risk. OTP Bank Nyrt is currently generating about 0.15 per unit of risk. If you would invest 48,600 in Appeninn Nyrt on August 26, 2024 and sell it today you would earn a total of 20,400 from holding Appeninn Nyrt or generate 41.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Appeninn Nyrt vs. OTP Bank Nyrt
Performance |
| Timeline |
| Appeninn Nyrt |
| OTP Bank Nyrt |
Appeninn Nyrt and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appeninn Nyrt and OTP Bank
The main advantage of trading using opposite Appeninn Nyrt and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appeninn Nyrt 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.| Appeninn Nyrt vs. Raba Jarmuipari Holding | Appeninn Nyrt vs. CIG Pannonia Life | Appeninn Nyrt vs. NordTelekom Telecommunications Service | Appeninn Nyrt vs. OPUS GLOBAL Nyrt |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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