Correlation Between OTP Bank and LBG Media

Can any of the company-specific risk be diversified away by investing in both OTP Bank and LBG Media 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 LBG Media 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 LBG Media PLC, you can compare the effects of market volatilities on OTP Bank and LBG Media 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 LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and LBG Media.

Diversification Opportunities for OTP Bank and LBG Media

0.18

Correlation Coefficient

OTP Bank  LBG Media

Average diversification

The 3 months correlation between OTP and LBG is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC 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 LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of OTP Bank i.e., OTP Bank and LBG Media go up and down completely randomly.

Pair Corralation between OTP Bank and LBG Media

If you would invest  9,000  in LBG Media PLC on April 8, 2025 and sell it today you would earn a total of  1,400  from holding LBG Media PLC or generate 15.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

OTP Bank Nyrt  vs.  LBG Media PLC

OTP Bank Nyrt

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OTP Bank Nyrt are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, OTP Bank may actually be approaching a critical reversion point that can send shares even higher in August 2025.

LBG Media PLC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LBG Media PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, LBG Media may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with OTP Bank and LBG Media

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

The idea behind OTP Bank Nyrt and LBG Media PLC 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.