Correlation Between OPUS GLOBAL and ALTEO Energiaszolgalta
Can any of the company-specific risk be diversified away by investing in both OPUS GLOBAL and ALTEO Energiaszolgalta 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 OPUS GLOBAL and ALTEO Energiaszolgalta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPUS GLOBAL Nyrt and ALTEO Energiaszolgaltato Nyrt, you can compare the effects of market volatilities on OPUS GLOBAL and ALTEO Energiaszolgalta 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 OPUS GLOBAL with a short position of ALTEO Energiaszolgalta. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPUS GLOBAL and ALTEO Energiaszolgalta.
Diversification Opportunities for OPUS GLOBAL and ALTEO Energiaszolgalta
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between OPUS and ALTEO is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding OPUS GLOBAL Nyrt and ALTEO Energiaszolgaltato Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALTEO Energiaszolgalta and OPUS GLOBAL 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 OPUS GLOBAL Nyrt are associated (or correlated) with ALTEO Energiaszolgalta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALTEO Energiaszolgalta has no effect on the direction of OPUS GLOBAL i.e., OPUS GLOBAL and ALTEO Energiaszolgalta go up and down completely randomly.
Pair Corralation between OPUS GLOBAL and ALTEO Energiaszolgalta
Assuming the 90 days trading horizon OPUS GLOBAL is expected to generate 3.36 times less return on investment than ALTEO Energiaszolgalta. But when comparing it to its historical volatility, OPUS GLOBAL Nyrt is 1.96 times less risky than ALTEO Energiaszolgalta. It trades about 0.25 of its potential returns per unit of risk. ALTEO Energiaszolgaltato Nyrt is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 462,000 in ALTEO Energiaszolgaltato Nyrt on November 10, 2024 and sell it today you would earn a total of 90,000 from holding ALTEO Energiaszolgaltato Nyrt or generate 19.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
OPUS GLOBAL Nyrt vs. ALTEO Energiaszolgaltato Nyrt
Performance |
| Timeline |
| OPUS GLOBAL Nyrt |
| ALTEO Energiaszolgalta |
OPUS GLOBAL and ALTEO Energiaszolgalta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPUS GLOBAL and ALTEO Energiaszolgalta
The main advantage of trading using opposite OPUS GLOBAL and ALTEO Energiaszolgalta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPUS GLOBAL position performs unexpectedly, ALTEO Energiaszolgalta 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 ALTEO Energiaszolgalta will offset losses from the drop in ALTEO Energiaszolgalta's long position.| OPUS GLOBAL vs. CIG Pannonia Life | OPUS GLOBAL vs. Infineon Technologies AG | OPUS GLOBAL vs. AKKO Invest Nyrt | OPUS GLOBAL vs. Deutsche Lufthansa AG |
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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