Correlation Between OPUS GLOBAL and MOL Nyrt

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Can any of the company-specific risk be diversified away by investing in both OPUS GLOBAL 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 OPUS GLOBAL and MOL Nyrt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPUS GLOBAL Nyrt and MOL Nyrt, you can compare the effects of market volatilities on OPUS GLOBAL 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 OPUS GLOBAL with a short position of MOL Nyrt. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPUS GLOBAL and MOL Nyrt.

Diversification Opportunities for OPUS GLOBAL and MOL Nyrt

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between OPUS and MOL is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding OPUS GLOBAL Nyrt and MOL Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Nyrt and OPUS GLOBAL 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 OPUS GLOBAL Nyrt 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 OPUS GLOBAL i.e., OPUS GLOBAL and MOL Nyrt go up and down completely randomly.

Pair Corralation between OPUS GLOBAL and MOL Nyrt

Assuming the 90 days trading horizon OPUS GLOBAL Nyrt is expected to generate 1.58 times more return on investment than MOL Nyrt. However, OPUS GLOBAL is 1.58 times more volatile than MOL Nyrt. It trades about 0.1 of its potential returns per unit of risk. MOL Nyrt is currently generating about 0.12 per unit of risk. If you would invest  50,500  in OPUS GLOBAL Nyrt on December 28, 2024 and sell it today you would earn a total of  5,400  from holding OPUS GLOBAL Nyrt or generate 10.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

OPUS GLOBAL Nyrt  vs.  MOL Nyrt

 Performance 
       Timeline  
OPUS GLOBAL Nyrt 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in OPUS GLOBAL Nyrt are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, OPUS GLOBAL may actually be approaching a critical reversion point that can send shares even higher in April 2025.
MOL Nyrt 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in MOL Nyrt are ranked lower than 9 (%) 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.

OPUS GLOBAL and MOL Nyrt Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with OPUS GLOBAL and MOL Nyrt

The main advantage of trading using opposite OPUS GLOBAL and MOL Nyrt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPUS GLOBAL 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 OPUS GLOBAL Nyrt 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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