Correlation Between Nasdaq and MOL Nyrt

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

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

Diversification Opportunities for Nasdaq and MOL Nyrt

0.47

Correlation Coefficient

Nasdaq  MOL Nyrt

Very weak diversification

The 3 months correlation between Nasdaq and MOL is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and MOL Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Nyrt and Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and MOL Nyrt go up and down completely randomly.

Pair Corralation between Nasdaq and MOL Nyrt

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the MOL Nyrt. In addition to that, Nasdaq is 1.3 times more volatile than MOL Nyrt. It trades about -0.02 of its total potential returns per unit of risk. MOL Nyrt is currently generating about 0.14 per unit of volatility. If you would invest  273,000  in MOL Nyrt on December 27, 2024 and sell it today you would earn a total of  26,400  from holding MOL Nyrt or generate 9.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Nasdaq Inc  vs.  MOL Nyrt

Nasdaq Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

MOL Nyrt

Risk-Adjusted Performance

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 weak fundamental indicators, MOL Nyrt may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nasdaq and MOL Nyrt

The main advantage of trading using opposite Nasdaq and MOL Nyrt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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 Nasdaq Inc 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.