Correlation Between MOL Nyrt and Budapesti Ingatlan

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

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

Diversification Opportunities for MOL Nyrt and Budapesti Ingatlan

0.19

Correlation Coefficient

MOL Nyrt  Budapesti Ingatlan

Average diversification

The 3 months correlation between MOL and Budapesti is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding MOL Nyrt and Budapesti Ingatlan Hasznositas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Budapesti Ingatlan 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 Budapesti Ingatlan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Budapesti Ingatlan has no effect on the direction of MOL Nyrt i.e., MOL Nyrt and Budapesti Ingatlan go up and down completely randomly.

Pair Corralation between MOL Nyrt and Budapesti Ingatlan

Assuming the 90 days trading horizon MOL Nyrt is expected to generate 0.83 times more return on investment than Budapesti Ingatlan. However, MOL Nyrt is 1.2 times less risky than Budapesti Ingatlan. It trades about 0.59 of its potential returns per unit of risk. Budapesti Ingatlan Hasznositasi is currently generating about 0.35 per unit of risk. If you would invest  266,800  in MOL Nyrt on October 20, 2024 and sell it today you would earn a total of  21,800  from holding MOL Nyrt or generate 8.17% return on investment over 90 days.

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

MOL Nyrt  vs.  Budapesti Ingatlan Hasznositas

MOL Nyrt

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MOL Nyrt are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, MOL Nyrt may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 sound fundamental indicators, Budapesti Ingatlan is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MOL Nyrt and Budapesti Ingatlan

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

The idea behind MOL Nyrt and Budapesti Ingatlan Hasznositasi 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.