Correlation Between Take Two and OTP Bank

Can any of the company-specific risk be diversified away by investing in both Take Two and OTP 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 Take Two and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Take Two Interactive Software and OTP Bank Nyrt, you can compare the effects of market volatilities on Take Two and OTP 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 Take Two with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Take Two and OTP Bank.

Diversification Opportunities for Take Two and OTP Bank

-0.01

Correlation Coefficient

Take Two  OTP Bank

Good diversification

The 3 months correlation between Take and OTP is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Take Two Interactive Software and OTP Bank Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OTP Bank Nyrt and Take Two 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 Take Two Interactive Software are associated (or correlated) with OTP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OTP Bank Nyrt has no effect on the direction of Take Two i.e., Take Two and OTP Bank go up and down completely randomly.

Pair Corralation between Take Two and OTP Bank

Assuming the 90 days trading horizon Take Two is expected to generate 3.97 times less return on investment than OTP Bank. But when comparing it to its historical volatility, Take Two Interactive Software is 7.66 times less risky than OTP Bank. It trades about 0.1 of its potential returns per unit of risk. OTP Bank Nyrt is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,259,000  in OTP Bank Nyrt on September 27, 2024 and sell it today you would earn a total of  0.00  from holding OTP Bank Nyrt or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.45%
Values	Daily Returns

Take Two Interactive Software  vs.  OTP Bank Nyrt

Take Two Interactive

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Take Two unveiled solid returns over the last few months and may actually be approaching a breakup point.

OTP Bank Nyrt

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OTP Bank Nyrt are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, OTP Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Take Two and OTP Bank

The main advantage of trading using opposite Take Two and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Take Two position performs unexpectedly, OTP 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 OTP Bank will offset losses from the drop in OTP Bank's long position.

The idea behind Take Two Interactive Software and OTP Bank Nyrt pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.