Correlation Between MOL Hungarian and Alfa Financial

Can any of the company-specific risk be diversified away by investing in both MOL Hungarian and Alfa Financial 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 MOL Hungarian and Alfa Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MOL Hungarian Oil and Alfa Financial Software, you can compare the effects of market volatilities on MOL Hungarian and Alfa Financial 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 MOL Hungarian with a short position of Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOL Hungarian and Alfa Financial.

Diversification Opportunities for MOL Hungarian and Alfa Financial

-0.15

Correlation Coefficient

MOL Hungarian  Alfa Financial

Good diversification

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

Pair Corralation between MOL Hungarian and Alfa Financial

If you would invest  292,200  in MOL Hungarian Oil on October 4, 2024 and sell it today you would earn a total of  0.00  from holding MOL Hungarian Oil or generate 0.0% return on investment over 90 days.

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

MOL Hungarian Oil  vs.  Alfa Financial Software

MOL Hungarian Oil

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MOL Hungarian Oil are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MOL Hungarian is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Alfa Financial Software

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alfa Financial Software are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Alfa Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with MOL Hungarian and Alfa Financial

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

The idea behind MOL Hungarian Oil and Alfa Financial Software 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.