Correlation Between AP Mller and OTP Bank
Can any of the company-specific risk be diversified away by investing in both AP Mller 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 AP Mller and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Mller and OTP Bank Nyrt, you can compare the effects of market volatilities on AP Mller 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 AP Mller with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Mller and OTP Bank.
Diversification Opportunities for AP Mller and OTP Bank
Very poor diversification
The 3 months correlation between DP4A and OTP is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller 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 AP Mller 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 AP Mller 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 AP Mller i.e., AP Mller and OTP Bank go up and down completely randomly.
Pair Corralation between AP Mller and OTP Bank
Assuming the 90 days trading horizon AP Mller is expected to under-perform the OTP Bank. In addition to that, AP Mller is 1.71 times more volatile than OTP Bank Nyrt. It trades about -0.16 of its total potential returns per unit of risk. OTP Bank Nyrt is currently generating about -0.07 per unit of volatility. If you would invest 5,310 in OTP Bank Nyrt on October 11, 2024 and sell it today you would lose (102.00) from holding OTP Bank Nyrt or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Mller vs. OTP Bank Nyrt
Performance |
| Timeline |
| AP Mller |
| OTP Bank Nyrt |
AP Mller and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Mller and OTP Bank
The main advantage of trading using opposite AP Mller and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Mller 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.| AP Mller vs. alstria office REIT AG | AP Mller vs. Hisense Home Appliances | AP Mller vs. CarsalesCom | AP Mller vs. Addus HomeCare |
| OTP Bank vs. OBSERVE MEDICAL ASA | OTP Bank vs. Scientific Games | OTP Bank vs. Genertec Universal Medical | OTP Bank vs. FRACTAL GAMING GROUP |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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