Correlation Between MOL Nyrt and ALTEO Energiaszolgalta

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

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

Diversification Opportunities for MOL Nyrt and ALTEO Energiaszolgalta

-0.23

Correlation Coefficient

MOL Nyrt  ALTEO Energiaszolgalta

Very good diversification

The 3 months correlation between MOL and ALTEO is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding MOL Nyrt and ALTEO Energiaszolgaltato Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALTEO Energiaszolgalta and MOL Nyrt 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 Nyrt are associated (or correlated) with ALTEO Energiaszolgalta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALTEO Energiaszolgalta has no effect on the direction of MOL Nyrt i.e., MOL Nyrt and ALTEO Energiaszolgalta go up and down completely randomly.

Pair Corralation between MOL Nyrt and ALTEO Energiaszolgalta

Assuming the 90 days trading horizon MOL Nyrt is expected to generate 0.93 times more return on investment than ALTEO Energiaszolgalta. However, MOL Nyrt is 1.07 times less risky than ALTEO Energiaszolgalta. It trades about 0.05 of its potential returns per unit of risk. ALTEO Energiaszolgaltato Nyrt is currently generating about -0.13 per unit of risk. If you would invest  263,600  in MOL Nyrt on September 15, 2024 and sell it today you would earn a total of  7,000  from holding MOL Nyrt or generate 2.66% return on investment over 90 days.

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

MOL Nyrt  vs.  ALTEO Energiaszolgaltato Nyrt

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.

ALTEO Energiaszolgalta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALTEO Energiaszolgaltato Nyrt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with MOL Nyrt and ALTEO Energiaszolgalta

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

The idea behind MOL Nyrt and ALTEO Energiaszolgaltato 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.