Correlation Between Optima Bank and Technical Olympic
Can any of the company-specific risk be diversified away by investing in both Optima Bank and Technical Olympic 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 Optima Bank and Technical Olympic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima bank SA and Technical Olympic SA, you can compare the effects of market volatilities on Optima Bank and Technical Olympic 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 Optima Bank with a short position of Technical Olympic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Bank and Technical Olympic.
Diversification Opportunities for Optima Bank and Technical Olympic
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Optima and Technical is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Optima bank SA and Technical Olympic SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technical Olympic and Optima Bank 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 Optima bank SA are associated (or correlated) with Technical Olympic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technical Olympic has no effect on the direction of Optima Bank i.e., Optima Bank and Technical Olympic go up and down completely randomly.
Pair Corralation between Optima Bank and Technical Olympic
Assuming the 90 days trading horizon Optima bank SA is expected to generate 1.11 times more return on investment than Technical Olympic. However, Optima Bank is 1.11 times more volatile than Technical Olympic SA. It trades about 0.19 of its potential returns per unit of risk. Technical Olympic SA is currently generating about -0.07 per unit of risk. If you would invest 709.00 in Optima bank SA on August 28, 2024 and sell it today you would earn a total of 593.00 from holding Optima bank SA or generate 83.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima bank SA vs. Technical Olympic SA
Performance |
| Timeline |
| Optima bank SA |
| Technical Olympic |
Optima Bank and Technical Olympic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Bank and Technical Olympic
The main advantage of trading using opposite Optima Bank and Technical Olympic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Bank position performs unexpectedly, Technical Olympic 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 Technical Olympic will offset losses from the drop in Technical Olympic's long position.| Optima Bank vs. Interlife General Insurance | Optima Bank vs. Marfin Investment Group | Optima Bank vs. Hellenic Telecommunications Organization | Optima Bank vs. Foodlink AE |
| Technical Olympic vs. Interlife General Insurance | Technical Olympic vs. National Bank of | Technical Olympic vs. Hellenic Telecommunications Organization | Technical Olympic vs. Marfin Investment Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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