Correlation Between Caledonia Investments and OTP Bank

Can any of the company-specific risk be diversified away by investing in both Caledonia Investments 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 Caledonia Investments and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Caledonia Investments and OTP Bank

0.0

Correlation Coefficient

Caledonia Investments  OTP Bank

Pay attention - limited upside

The 3 months correlation between Caledonia and OTP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Investments 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 Caledonia Investments 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 Caledonia Investments 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 Caledonia Investments i.e., Caledonia Investments and OTP Bank go up and down completely randomly.

Pair Corralation between Caledonia Investments and OTP Bank

If you would invest  354,000  in Caledonia Investments on December 23, 2024 and sell it today you would earn a total of  13,000  from holding Caledonia Investments or generate 3.67% return on investment over 90 days.

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

Caledonia Investments  vs.  OTP Bank Nyrt

Caledonia Investments

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Caledonia Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Caledonia Investments is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Caledonia Investments and OTP Bank

The main advantage of trading using opposite Caledonia Investments and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Investments 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 Caledonia Investments 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.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.