Correlation Between SBI Insurance and OTP Bank
Can any of the company-specific risk be diversified away by investing in both SBI Insurance 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 SBI Insurance and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Insurance Group and OTP Bank Nyrt, you can compare the effects of market volatilities on SBI Insurance 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 SBI Insurance with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and OTP Bank.
Diversification Opportunities for SBI Insurance and OTP Bank
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between SBI and OTP is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group 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 SBI Insurance 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 SBI Insurance Group 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 SBI Insurance i.e., SBI Insurance and OTP Bank go up and down completely randomly.
Pair Corralation between SBI Insurance and OTP Bank
Assuming the 90 days trading horizon SBI Insurance is expected to generate 2.86 times less return on investment than OTP Bank. But when comparing it to its historical volatility, SBI Insurance Group is 1.39 times less risky than OTP Bank. It trades about 0.19 of its potential returns per unit of risk. OTP Bank Nyrt is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 5,232 in OTP Bank Nyrt on November 6, 2024 and sell it today you would earn a total of 732.00 from holding OTP Bank Nyrt or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Insurance Group vs. OTP Bank Nyrt
Performance |
| Timeline |
| SBI Insurance Group |
| OTP Bank Nyrt |
SBI Insurance and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Insurance and OTP Bank
The main advantage of trading using opposite SBI Insurance and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance 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.| SBI Insurance vs. RYU Apparel | SBI Insurance vs. Aluminum of | SBI Insurance vs. Fortescue Metals Group | SBI Insurance vs. ADRIATIC METALS LS 013355 |
| OTP Bank vs. Playtech plc | OTP Bank vs. UPDATE SOFTWARE | OTP Bank vs. Playa Hotels Resorts | OTP Bank vs. FORMPIPE SOFTWARE AB |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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