Correlation Between MOL Nyrt and Infineon Technologies
Can any of the company-specific risk be diversified away by investing in both MOL Nyrt and Infineon Technologies 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 MOL Nyrt and Infineon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOL Nyrt and Infineon Technologies AG, you can compare the effects of market volatilities on MOL Nyrt and Infineon Technologies 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 MOL Nyrt with a short position of Infineon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOL Nyrt and Infineon Technologies.
Diversification Opportunities for MOL Nyrt and Infineon Technologies
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MOL and Infineon is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding MOL Nyrt and Infineon Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infineon Technologies and MOL Nyrt 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 MOL Nyrt are associated (or correlated) with Infineon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infineon Technologies has no effect on the direction of MOL Nyrt i.e., MOL Nyrt and Infineon Technologies go up and down completely randomly.
Pair Corralation between MOL Nyrt and Infineon Technologies
Assuming the 90 days trading horizon MOL Nyrt is expected to generate 2.63 times less return on investment than Infineon Technologies. But when comparing it to its historical volatility, MOL Nyrt is 3.08 times less risky than Infineon Technologies. It trades about 0.02 of its potential returns per unit of risk. Infineon Technologies AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,235,197 in Infineon Technologies AG on August 28, 2024 and sell it today you would earn a total of 18,003 from holding Infineon Technologies AG or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 53.24% |
| Values | Daily Returns |
MOL Nyrt vs. Infineon Technologies AG
Performance |
| Timeline |
| MOL Nyrt |
| Infineon Technologies |
MOL Nyrt and Infineon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOL Nyrt and Infineon Technologies
The main advantage of trading using opposite MOL Nyrt and Infineon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOL Nyrt position performs unexpectedly, Infineon Technologies 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 Infineon Technologies will offset losses from the drop in Infineon Technologies' long position.| MOL Nyrt vs. Magyar Telekom PLC | MOL Nyrt vs. Infineon Technologies AG | MOL Nyrt vs. AKKO Invest Nyrt | MOL Nyrt vs. AutoWallis Nyrt |
| Infineon Technologies vs. OTP Bank Nyrt | Infineon Technologies vs. MOL Nyrt | Infineon Technologies vs. OPUS GLOBAL Nyrt | Infineon Technologies vs. ALTEO Energiaszolgaltato 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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