Correlation Between OPUS GLOBAL and NordTelekom Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both OPUS GLOBAL and NordTelekom Telecommunicatio 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 NordTelekom Telecommunicatio 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 NordTelekom Telecommunications Service, you can compare the effects of market volatilities on OPUS GLOBAL and NordTelekom Telecommunicatio 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 NordTelekom Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPUS GLOBAL and NordTelekom Telecommunicatio.

Diversification Opportunities for OPUS GLOBAL and NordTelekom Telecommunicatio

-0.19

Correlation Coefficient

OPUS GLOBAL  NordTelekom Telecommunicatio

Good diversification

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

Pair Corralation between OPUS GLOBAL and NordTelekom Telecommunicatio

Assuming the 90 days trading horizon OPUS GLOBAL Nyrt is expected to generate 0.29 times more return on investment than NordTelekom Telecommunicatio. However, OPUS GLOBAL Nyrt is 3.44 times less risky than NordTelekom Telecommunicatio. It trades about 0.15 of its potential returns per unit of risk. NordTelekom Telecommunications Service is currently generating about -0.02 per unit of risk. If you would invest  45,850  in OPUS GLOBAL Nyrt on September 15, 2024 and sell it today you would earn a total of  5,250  from holding OPUS GLOBAL Nyrt or generate 11.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

OPUS GLOBAL Nyrt  vs.  NordTelekom Telecommunications

OPUS GLOBAL Nyrt

Risk-Adjusted Performance

11 of 100

Good

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

NordTelekom Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NordTelekom Telecommunications Service has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with OPUS GLOBAL and NordTelekom Telecommunicatio

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

The idea behind OPUS GLOBAL Nyrt and NordTelekom Telecommunications Service 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.