Correlation Between Faron Pharmaceuticals and OTP Bank
Can any of the company-specific risk be diversified away by investing in both Faron Pharmaceuticals 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 Faron Pharmaceuticals and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faron Pharmaceuticals Oy and OTP Bank Nyrt, you can compare the effects of market volatilities on Faron Pharmaceuticals 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 Faron Pharmaceuticals with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faron Pharmaceuticals and OTP Bank.
Diversification Opportunities for Faron Pharmaceuticals and OTP Bank
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Faron and OTP is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Faron Pharmaceuticals Oy 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 Faron Pharmaceuticals 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 Faron Pharmaceuticals Oy 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 Faron Pharmaceuticals i.e., Faron Pharmaceuticals and OTP Bank go up and down completely randomly.
Pair Corralation between Faron Pharmaceuticals and OTP Bank
Assuming the 90 days trading horizon Faron Pharmaceuticals Oy is expected to generate 0.64 times more return on investment than OTP Bank. However, Faron Pharmaceuticals Oy is 1.56 times less risky than OTP Bank. It trades about 0.07 of its potential returns per unit of risk. OTP Bank Nyrt is currently generating about 0.05 per unit of risk. If you would invest 12,000 in Faron Pharmaceuticals Oy on October 14, 2024 and sell it today you would earn a total of 8,000 from holding Faron Pharmaceuticals Oy or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faron Pharmaceuticals Oy vs. OTP Bank Nyrt
Performance |
| Timeline |
| Faron Pharmaceuticals |
| OTP Bank Nyrt |
Faron Pharmaceuticals and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faron Pharmaceuticals and OTP Bank
The main advantage of trading using opposite Faron Pharmaceuticals and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faron Pharmaceuticals 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.| Faron Pharmaceuticals vs. Omega Healthcare Investors | Faron Pharmaceuticals vs. Invesco Physical Silver | Faron Pharmaceuticals vs. Cardinal Health | Faron Pharmaceuticals vs. Anglo Asian Mining |
| OTP Bank vs. Hecla Mining Co | OTP Bank vs. Hochschild Mining plc | OTP Bank vs. Silver Bullet Data | OTP Bank vs. United Airlines Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |