Correlation Between OTP Bank and AKKO Invest
Can any of the company-specific risk be diversified away by investing in both OTP Bank and AKKO Invest 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 OTP Bank and AKKO Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OTP Bank Nyrt and AKKO Invest Nyrt, you can compare the effects of market volatilities on OTP Bank and AKKO Invest 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 OTP Bank with a short position of AKKO Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and AKKO Invest.
Diversification Opportunities for OTP Bank and AKKO Invest
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between OTP and AKKO is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and AKKO Invest Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKKO Invest Nyrt and OTP 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 OTP Bank Nyrt are associated (or correlated) with AKKO Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKKO Invest Nyrt has no effect on the direction of OTP Bank i.e., OTP Bank and AKKO Invest go up and down completely randomly.
Pair Corralation between OTP Bank and AKKO Invest
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 0.55 times more return on investment than AKKO Invest. However, OTP Bank Nyrt is 1.82 times less risky than AKKO Invest. It trades about 0.45 of its potential returns per unit of risk. AKKO Invest Nyrt is currently generating about 0.13 per unit of risk. If you would invest 1,894,000 in OTP Bank Nyrt on August 27, 2024 and sell it today you would earn a total of 276,000 from holding OTP Bank Nyrt or generate 14.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
OTP Bank Nyrt vs. AKKO Invest Nyrt
Performance |
| Timeline |
| OTP Bank Nyrt |
| AKKO Invest Nyrt |
OTP Bank and AKKO Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and AKKO Invest
The main advantage of trading using opposite OTP Bank and AKKO Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, AKKO Invest 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 AKKO Invest will offset losses from the drop in AKKO Invest's long position.| OTP Bank vs. NordTelekom Telecommunications Service | OTP Bank vs. Nutex Investments PLC | OTP Bank vs. Delta Technologies Nyrt |
| AKKO Invest vs. NordTelekom Telecommunications Service | AKKO Invest vs. Nutex Investments PLC | AKKO Invest 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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