Correlation Between Budapesti Ingatlan and MOL Nyrt

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

By analyzing existing cross correlation between Budapesti Ingatlan Hasznositasi and MOL Nyrt, you can compare the effects of market volatilities on Budapesti Ingatlan and MOL Nyrt 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 Budapesti Ingatlan with a short position of MOL Nyrt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Budapesti Ingatlan and MOL Nyrt.

Diversification Opportunities for Budapesti Ingatlan and MOL Nyrt

-0.02

Correlation Coefficient

Budapesti Ingatlan  MOL Nyrt

Good diversification

The 3 months correlation between Budapesti and MOL is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Budapesti Ingatlan Hasznositas and MOL Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Nyrt and Budapesti Ingatlan 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 Budapesti Ingatlan Hasznositasi are associated (or correlated) with MOL Nyrt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL Nyrt has no effect on the direction of Budapesti Ingatlan i.e., Budapesti Ingatlan and MOL Nyrt go up and down completely randomly.

Pair Corralation between Budapesti Ingatlan and MOL Nyrt

Assuming the 90 days trading horizon Budapesti Ingatlan Hasznositasi is expected to generate 1.92 times more return on investment than MOL Nyrt. However, Budapesti Ingatlan is 1.92 times more volatile than MOL Nyrt. It trades about 0.07 of its potential returns per unit of risk. MOL Nyrt is currently generating about 0.05 per unit of risk. If you would invest  47,000  in Budapesti Ingatlan Hasznositasi on September 15, 2024 and sell it today you would earn a total of  3,200  from holding Budapesti Ingatlan Hasznositasi or generate 6.81% return on investment over 90 days.

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

Budapesti Ingatlan Hasznositas  vs.  MOL Nyrt

Budapesti Ingatlan

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Budapesti Ingatlan Hasznositasi are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Budapesti Ingatlan may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MOL Nyrt

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOL Nyrt are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, MOL Nyrt is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Budapesti Ingatlan and MOL Nyrt

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

The idea behind Budapesti Ingatlan Hasznositasi and MOL 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.