Correlation Between Deutsche Lufthansa and MOL Nyrt
Can any of the company-specific risk be diversified away by investing in both Deutsche Lufthansa and MOL Nyrt 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 Deutsche Lufthansa and MOL Nyrt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Lufthansa AG and MOL Nyrt, you can compare the effects of market volatilities on Deutsche Lufthansa and MOL Nyrt 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 Deutsche Lufthansa with a short position of MOL Nyrt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Lufthansa and MOL Nyrt.
Diversification Opportunities for Deutsche Lufthansa and MOL Nyrt
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Deutsche and MOL is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Lufthansa AG and MOL Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Nyrt and Deutsche Lufthansa 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 Deutsche Lufthansa AG are associated (or correlated) with MOL Nyrt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL Nyrt has no effect on the direction of Deutsche Lufthansa i.e., Deutsche Lufthansa and MOL Nyrt go up and down completely randomly.
Pair Corralation between Deutsche Lufthansa and MOL Nyrt
Assuming the 90 days trading horizon Deutsche Lufthansa AG is expected to under-perform the MOL Nyrt. In addition to that, Deutsche Lufthansa is 1.62 times more volatile than MOL Nyrt. It trades about -0.31 of its total potential returns per unit of risk. MOL Nyrt is currently generating about -0.07 per unit of volatility. If you would invest 294,000 in MOL Nyrt on January 22, 2025 and sell it today you would lose (8,400) from holding MOL Nyrt or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.0% |
| Values | Daily Returns |
Deutsche Lufthansa AG vs. MOL Nyrt
Performance |
| Timeline |
| Deutsche Lufthansa |
| MOL Nyrt |
Deutsche Lufthansa and MOL Nyrt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Lufthansa and MOL Nyrt
The main advantage of trading using opposite Deutsche Lufthansa and MOL Nyrt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Lufthansa position performs unexpectedly, MOL Nyrt 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 MOL Nyrt will offset losses from the drop in MOL Nyrt's long position.| Deutsche Lufthansa vs. OTP Bank Nyrt | Deutsche Lufthansa vs. MOL Nyrt | Deutsche Lufthansa vs. OPUS GLOBAL Nyrt | Deutsche Lufthansa vs. ALTEO Energiaszolgaltato Nyrt |
| MOL Nyrt vs. Nutex Investments PLC | MOL Nyrt vs. Commerzbank AG | MOL Nyrt vs. Infineon Technologies AG | MOL Nyrt vs. OTP Bank 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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