Correlation Between Monument Mining and OTP Bank
Can any of the company-specific risk be diversified away by investing in both Monument Mining 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 Monument Mining and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monument Mining Limited and OTP Bank Nyrt, you can compare the effects of market volatilities on Monument Mining 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 Monument Mining with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and OTP Bank.
Diversification Opportunities for Monument Mining and OTP Bank
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Monument and OTP is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited 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 Monument Mining 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 Monument Mining Limited 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 Monument Mining i.e., Monument Mining and OTP Bank go up and down completely randomly.
Pair Corralation between Monument Mining and OTP Bank
Assuming the 90 days trading horizon Monument Mining Limited is expected to generate 2.28 times more return on investment than OTP Bank. However, Monument Mining is 2.28 times more volatile than OTP Bank Nyrt. It trades about 0.35 of its potential returns per unit of risk. OTP Bank Nyrt is currently generating about 0.17 per unit of risk. If you would invest 18.00 in Monument Mining Limited on October 16, 2024 and sell it today you would earn a total of 5.00 from holding Monument Mining Limited or generate 27.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monument Mining Limited vs. OTP Bank Nyrt
Performance |
| Timeline |
| Monument Mining |
| OTP Bank Nyrt |
Monument Mining and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and OTP Bank
The main advantage of trading using opposite Monument Mining and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining 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.| Monument Mining vs. SOFI TECHNOLOGIES | Monument Mining vs. Agilent Technologies | Monument Mining vs. InterContinental Hotels Group | Monument Mining vs. Meli Hotels International |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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