Correlation Between Games Workshop and OTP Bank

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

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

Diversification Opportunities for Games Workshop and OTP Bank

-0.13

Correlation Coefficient

Games Workshop  OTP Bank

Good diversification

The 3 months correlation between Games and OTP is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group 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 Games Workshop 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 Games Workshop Group 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 Games Workshop i.e., Games Workshop and OTP Bank go up and down completely randomly.

Pair Corralation between Games Workshop and OTP Bank

Assuming the 90 days trading horizon Games Workshop is expected to generate 1.65 times less return on investment than OTP Bank. But when comparing it to its historical volatility, Games Workshop Group is 3.29 times less risky than OTP Bank. It trades about 0.06 of its potential returns per unit of risk. OTP Bank Nyrt is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,176,324  in OTP Bank Nyrt on September 29, 2024 and sell it today you would earn a total of  82,676  from holding OTP Bank Nyrt or generate 7.03% return on investment over 90 days.

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

Games Workshop Group  vs.  OTP Bank Nyrt

Games Workshop Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Games Workshop exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 uncertain basic indicators, OTP Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Games Workshop and OTP Bank

The main advantage of trading using opposite Games Workshop and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop 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 Games Workshop Group 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.