Correlation Between Travel + and OTP Bank

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

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

Diversification Opportunities for Travel + and OTP Bank

0.0

Correlation Coefficient

Travel +  OTP Bank

Pay attention - limited upside

The 3 months correlation between Travel and OTP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Travel Leisure Co 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 Travel + 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 Travel Leisure Co 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 Travel + i.e., Travel + and OTP Bank go up and down completely randomly.

Pair Corralation between Travel + and OTP Bank

If you would invest  5,759  in Travel Leisure Co on December 22, 2024 and sell it today you would earn a total of  56.00  from holding Travel Leisure Co or generate 0.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Travel Leisure Co  vs.  OTP Bank Nyrt

Travel Leisure

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Travel Leisure Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Travel + is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

OTP Bank Nyrt

Risk-Adjusted Performance

Very Weak

Over the last 90 days OTP Bank Nyrt has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, OTP Bank is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Travel + and OTP Bank

The main advantage of trading using opposite Travel + and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travel + 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 Travel Leisure Co 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.