Correlation Between OTP Bank and ANY Security

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

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

Diversification Opportunities for OTP Bank and ANY Security

0.75

Correlation Coefficient

OTP Bank  ANY Security

Poor diversification

The 3 months correlation between OTP and ANY is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and ANY Security Printing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANY Security Printing and OTP Bank 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 OTP Bank Nyrt are associated (or correlated) with ANY Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANY Security Printing has no effect on the direction of OTP Bank i.e., OTP Bank and ANY Security go up and down completely randomly.

Pair Corralation between OTP Bank and ANY Security

Assuming the 90 days trading horizon OTP Bank is expected to generate 2.2 times less return on investment than ANY Security. In addition to that, OTP Bank is 1.14 times more volatile than ANY Security Printing. It trades about 0.18 of its total potential returns per unit of risk. ANY Security Printing is currently generating about 0.44 per unit of volatility. If you would invest  416,000  in ANY Security Printing on December 28, 2024 and sell it today you would earn a total of  210,000  from holding ANY Security Printing or generate 50.48% return on investment over 90 days.

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

OTP Bank Nyrt  vs.  ANY Security Printing

OTP Bank Nyrt

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OTP Bank Nyrt are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, OTP Bank exhibited solid returns over the last few months and may actually be approaching a breakup point.

ANY Security Printing

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ANY Security Printing are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, ANY Security exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OTP Bank and ANY Security

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

The idea behind OTP Bank Nyrt and ANY Security Printing 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.