Correlation Between Alphabet and OTP Bank
Can any of the company-specific risk be diversified away by investing in both Alphabet 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 Alphabet and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and OTP Bank Nyrt, you can compare the effects of market volatilities on Alphabet 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 Alphabet with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and OTP Bank.
Diversification Opportunities for Alphabet and OTP Bank
Good diversification
The 3 months correlation between Alphabet and OTP is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C 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 Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and OTP Bank go up and down completely randomly.
Pair Corralation between Alphabet and OTP Bank
Given the investment horizon of 90 days Alphabet Inc Class C is expected to under-perform the OTP Bank. In addition to that, Alphabet is 1.14 times more volatile than OTP Bank Nyrt. It trades about -0.1 of its total potential returns per unit of risk. OTP Bank Nyrt is currently generating about -0.05 per unit of volatility. If you would invest 2,530,000 in OTP Bank Nyrt on January 18, 2025 and sell it today you would lose (90,000) from holding OTP Bank Nyrt or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. OTP Bank Nyrt
Performance |
| Timeline |
| Alphabet Class C |
| OTP Bank Nyrt |
Alphabet and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and OTP Bank
The main advantage of trading using opposite Alphabet and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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.The idea behind Alphabet Inc Class C and OTP Bank Nyrt pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| OTP Bank vs. NordTelekom Telecommunications Service | OTP Bank vs. Infineon Technologies AG | OTP Bank vs. Nutex Investments PLC | OTP Bank vs. AKKO Invest 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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