Correlation Between Budapest and AKKO Invest
Can any of the company-specific risk be diversified away by investing in both Budapest and AKKO Invest 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 Budapest and AKKO Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Budapest SE and AKKO Invest Nyrt, you can compare the effects of market volatilities on Budapest and AKKO Invest 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 Budapest with a short position of AKKO Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Budapest and AKKO Invest.
Diversification Opportunities for Budapest and AKKO Invest
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Budapest and AKKO is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Budapest SE and AKKO Invest Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKKO Invest Nyrt and Budapest 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 Budapest SE are associated (or correlated) with AKKO Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKKO Invest Nyrt has no effect on the direction of Budapest i.e., Budapest and AKKO Invest go up and down completely randomly.
Pair Corralation between Budapest and AKKO Invest
Assuming the 90 days trading horizon Budapest is expected to generate 1.36 times less return on investment than AKKO Invest. But when comparing it to its historical volatility, Budapest SE is 3.44 times less risky than AKKO Invest. It trades about 0.17 of its potential returns per unit of risk. AKKO Invest Nyrt is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 20,500 in AKKO Invest Nyrt on August 28, 2024 and sell it today you would earn a total of 14,000 from holding AKKO Invest Nyrt or generate 68.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.43% |
| Values | Daily Returns |
Budapest SE vs. AKKO Invest Nyrt
Performance |
| Timeline |
Budapest and AKKO Invest Volatility Contrast
Predicted Return Density |
| Returns |
Budapest SE
Pair trading matchups for Budapest
AKKO Invest Nyrt
Pair trading matchups for AKKO Invest
Pair Trading with Budapest and AKKO Invest
The main advantage of trading using opposite Budapest and AKKO Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Budapest position performs unexpectedly, AKKO Invest 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 AKKO Invest will offset losses from the drop in AKKO Invest's long position.| Budapest vs. Nutex Investments PLC | Budapest vs. NordTelekom Telecommunications Service | Budapest vs. Delta Technologies Nyrt | Budapest vs. OTP Bank Nyrt |
| AKKO Invest vs. NordTelekom Telecommunications Service | AKKO Invest vs. CIG Pannonia Life | AKKO Invest vs. Infineon Technologies AG | AKKO Invest vs. Nutex Investments PLC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |