Correlation Between OTP Bank and 3I Group

Can any of the company-specific risk be diversified away by investing in both OTP Bank and 3I Group 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 3I Group 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 3I Group PLC, you can compare the effects of market volatilities on OTP Bank and 3I Group 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 3I Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and 3I Group.

Diversification Opportunities for OTP Bank and 3I Group

0.0

Correlation Coefficient

OTP Bank  3I Group

Pay attention - limited upside

The 3 months correlation between OTP and III is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and 3I Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3I Group 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 3I Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3I Group PLC has no effect on the direction of OTP Bank i.e., OTP Bank and 3I Group go up and down completely randomly.

Pair Corralation between OTP Bank and 3I Group

If you would invest  354,800  in 3I Group PLC on December 20, 2024 and sell it today you would earn a total of  26,700  from holding 3I Group PLC or generate 7.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

OTP Bank Nyrt  vs.  3I Group PLC

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

3I Group PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 3I Group PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, 3I Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with OTP Bank and 3I Group

The main advantage of trading using opposite OTP Bank and 3I Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, 3I Group 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 3I Group will offset losses from the drop in 3I Group's long position.

The idea behind OTP Bank Nyrt and 3I Group PLC 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.