Correlation Between OTP Bank and Nutex Investments
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Nutex Investments 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 Nutex Investments 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 Nutex Investments PLC, you can compare the effects of market volatilities on OTP Bank and Nutex Investments 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 Nutex Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Nutex Investments.
Diversification Opportunities for OTP Bank and Nutex Investments
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OTP and Nutex is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Nutex Investments PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutex Investments PLC 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 Nutex Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutex Investments PLC has no effect on the direction of OTP Bank i.e., OTP Bank and Nutex Investments go up and down completely randomly.
Pair Corralation between OTP Bank and Nutex Investments
Assuming the 90 days trading horizon OTP Bank Nyrt is expected to generate 1.43 times more return on investment than Nutex Investments. However, OTP Bank is 1.43 times more volatile than Nutex Investments PLC. It trades about 0.5 of its potential returns per unit of risk. Nutex Investments PLC is currently generating about -0.07 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 300,000 from holding OTP Bank Nyrt or generate 15.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OTP Bank Nyrt vs. Nutex Investments PLC
Performance |
| Timeline |
| OTP Bank Nyrt |
| Nutex Investments PLC |
OTP Bank and Nutex Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OTP Bank and Nutex Investments
The main advantage of trading using opposite OTP Bank and Nutex Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Nutex Investments 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 Nutex Investments will offset losses from the drop in Nutex Investments' long position.| OTP Bank vs. NordTelekom Telecommunications Service | OTP Bank vs. Nutex Investments PLC | OTP Bank vs. Delta Technologies Nyrt |
| Nutex Investments vs. NordTelekom Telecommunications Service | Nutex Investments vs. CIG Pannonia Life | Nutex Investments vs. Infineon Technologies AG | Nutex Investments 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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