Correlation Between NVIDIA and OTP Bank
Can any of the company-specific risk be diversified away by investing in both NVIDIA 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 NVIDIA and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and OTP Bank Nyrt, you can compare the effects of market volatilities on NVIDIA 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 NVIDIA with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and OTP Bank.
Diversification Opportunities for NVIDIA and OTP Bank
Poor diversification
The 3 months correlation between NVIDIA and OTP is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA 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 NVIDIA 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 NVIDIA 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 NVIDIA i.e., NVIDIA and OTP Bank go up and down completely randomly.
Pair Corralation between NVIDIA and OTP Bank
Given the investment horizon of 90 days NVIDIA is expected to generate 2.62 times more return on investment than OTP Bank. However, NVIDIA is 2.62 times more volatile than OTP Bank Nyrt. It trades about 0.11 of its potential returns per unit of risk. OTP Bank Nyrt is currently generating about 0.12 per unit of risk. If you would invest 7,910 in NVIDIA on August 27, 2024 and sell it today you would earn a total of 6,285 from holding NVIDIA or generate 79.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.87% |
| Values | Daily Returns |
NVIDIA vs. OTP Bank Nyrt
Performance |
| Timeline |
| NVIDIA |
| OTP Bank Nyrt |
NVIDIA and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and OTP Bank
The main advantage of trading using opposite NVIDIA and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA 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.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| OTP Bank vs. Magyar Telekom PLC | OTP Bank vs. CIG Pannonia Life | OTP Bank vs. Infineon Technologies AG | 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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