Correlation Between OTP Bank and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Deutsche 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 OTP Bank and Deutsche Bank 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 Deutsche Bank AG, you can compare the effects of market volatilities on OTP Bank and Deutsche 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 OTP Bank with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Deutsche Bank.
Diversification Opportunities for OTP Bank and Deutsche Bank
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between OTP and Deutsche is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Deutsche Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank AG 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 Deutsche Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Bank AG has no effect on the direction of OTP Bank i.e., OTP Bank and Deutsche Bank go up and down completely randomly.
Pair Corralation between OTP Bank and Deutsche Bank
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 0.74 times more return on investment than Deutsche Bank. However, OTP Bank Nyrt is 1.35 times less risky than Deutsche Bank. It trades about 0.26 of its potential returns per unit of risk. Deutsche Bank AG is currently generating about 0.14 per unit of risk. If you would invest 1,895,000 in OTP Bank Nyrt on September 13, 2024 and sell it today you would earn a total of 300,000 from holding OTP Bank Nyrt or generate 15.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 57.14% |
| Values | Daily Returns |
OTP Bank Nyrt vs. Deutsche Bank AG
Performance |
| Timeline |
| OTP Bank Nyrt |
| Deutsche Bank AG |
OTP Bank and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Deutsche Bank
The main advantage of trading using opposite OTP Bank and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Deutsche 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 Deutsche Bank will offset losses from the drop in Deutsche Bank's long position.| OTP Bank vs. NordTelekom Telecommunications Service | OTP Bank vs. Infineon Technologies AG | OTP Bank vs. Nutex Investments PLC | OTP Bank vs. AKKO Invest Nyrt |
| Deutsche Bank vs. OTP Bank Nyrt | Deutsche Bank vs. MOL Nyrt | Deutsche Bank vs. OPUS GLOBAL Nyrt | Deutsche Bank 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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