Correlation Between Commerzbank and MOL Nyrt
Can any of the company-specific risk be diversified away by investing in both Commerzbank and MOL Nyrt 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 Commerzbank and MOL Nyrt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerzbank AG and MOL Nyrt, you can compare the effects of market volatilities on Commerzbank and MOL Nyrt 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 Commerzbank with a short position of MOL Nyrt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and MOL Nyrt.
Diversification Opportunities for Commerzbank and MOL Nyrt
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commerzbank and MOL is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG and MOL Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Nyrt and Commerzbank 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 Commerzbank AG are associated (or correlated) with MOL Nyrt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL Nyrt has no effect on the direction of Commerzbank i.e., Commerzbank and MOL Nyrt go up and down completely randomly.
Pair Corralation between Commerzbank and MOL Nyrt
Assuming the 90 days trading horizon Commerzbank AG is expected to generate 1.67 times more return on investment than MOL Nyrt. However, Commerzbank is 1.67 times more volatile than MOL Nyrt. It trades about 0.34 of its potential returns per unit of risk. MOL Nyrt is currently generating about 0.06 per unit of risk. If you would invest 738,400 in Commerzbank AG on November 27, 2024 and sell it today you would earn a total of 58,400 from holding Commerzbank AG or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.09% |
| Values | Daily Returns |
Commerzbank AG vs. MOL Nyrt
Performance |
| Timeline |
| Commerzbank AG |
| MOL Nyrt |
Commerzbank and MOL Nyrt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerzbank and MOL Nyrt
The main advantage of trading using opposite Commerzbank and MOL Nyrt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerzbank position performs unexpectedly, MOL Nyrt 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 MOL Nyrt will offset losses from the drop in MOL Nyrt's long position.| Commerzbank vs. OTP Bank Nyrt | Commerzbank vs. NordTelekom Telecommunications Service | Commerzbank vs. Infineon Technologies AG |
| MOL Nyrt vs. Delta Technologies Nyrt | MOL Nyrt vs. Deutsche Bank AG | MOL Nyrt vs. NordTelekom Telecommunications Service | MOL Nyrt vs. OTP Bank 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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