Correlation Between Nutex Investments and MOL Nyrt

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

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

Diversification Opportunities for Nutex Investments and MOL Nyrt

0.58

Correlation Coefficient

Nutex Investments  MOL Nyrt

Very weak diversification

The 3 months correlation between Nutex and MOL is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nutex Investments PLC and MOL Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Nyrt and Nutex 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 Nutex Investments PLC 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 Nutex Investments i.e., Nutex Investments and MOL Nyrt go up and down completely randomly.

Pair Corralation between Nutex Investments and MOL Nyrt

Assuming the 90 days trading horizon Nutex Investments is expected to generate 1.65 times less return on investment than MOL Nyrt. In addition to that, Nutex Investments is 4.29 times more volatile than MOL Nyrt. It trades about 0.08 of its total potential returns per unit of risk. MOL Nyrt is currently generating about 0.59 per unit of volatility. 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	Weak
Accuracy	100.0%
Values	Daily Returns

Nutex Investments PLC  vs.  MOL Nyrt

Nutex Investments PLC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nutex Investments PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Nutex Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Nutex Investments and MOL Nyrt

The main advantage of trading using opposite Nutex Investments and MOL Nyrt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nutex Investments 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 Nutex Investments PLC 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.