Correlation Between ANY Security and OTP Bank

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Can any of the company-specific risk be diversified away by investing in both ANY Security 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 ANY Security and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANY Security Printing and OTP Bank Nyrt, you can compare the effects of market volatilities on ANY Security 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 ANY Security with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANY Security and OTP Bank.

Diversification Opportunities for ANY Security and OTP Bank

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between ANY and OTP is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ANY Security Printing 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 ANY Security 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 ANY Security Printing 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 ANY Security i.e., ANY Security and OTP Bank go up and down completely randomly.

Pair Corralation between ANY Security and OTP Bank

Assuming the 90 days trading horizon ANY Security Printing is expected to generate 0.88 times more return on investment than OTP Bank. However, ANY Security Printing is 1.14 times less risky than OTP Bank. It trades about 0.41 of its potential returns per unit of risk. OTP Bank Nyrt is currently generating about 0.2 per unit of risk. If you would invest  416,000  in ANY Security Printing on December 27, 2024 and sell it today you would earn a total of  184,000  from holding ANY Security Printing or generate 44.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

ANY Security Printing  vs.  OTP Bank Nyrt

 Performance 
       Timeline  
ANY Security Printing 

Risk-Adjusted Performance

Very Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ANY Security Printing are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, ANY Security exhibited solid returns over the last few months and may actually be approaching a breakup point.
OTP Bank Nyrt 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in OTP Bank Nyrt are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, OTP Bank exhibited solid returns over the last few months and may actually be approaching a breakup point.

ANY Security and OTP Bank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ANY Security and OTP Bank

The main advantage of trading using opposite ANY Security and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANY Security 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 ANY Security Printing 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.
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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