Correlation Between OTP Bank and Sancus Lending

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

Diversification Opportunities for OTP Bank and Sancus Lending

0.15

Correlation Coefficient

OTP Bank  Sancus Lending

Average diversification

The 3 months correlation between OTP and Sancus is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Sancus Lending Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sancus Lending Group 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 Sancus Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sancus Lending Group has no effect on the direction of OTP Bank i.e., OTP Bank and Sancus Lending go up and down completely randomly.

Pair Corralation between OTP Bank and Sancus Lending

If you would invest  30.00  in Sancus Lending Group on October 9, 2024 and sell it today you would earn a total of  15.00  from holding Sancus Lending Group or generate 50.0% return on investment over 90 days.

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

OTP Bank Nyrt  vs.  Sancus Lending Group

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.

Sancus Lending Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sancus Lending Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sancus Lending may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with OTP Bank and Sancus Lending

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

The idea behind OTP Bank Nyrt and Sancus Lending Group 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.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..