Correlation Between Fevertree Drinks and OTP Bank

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

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

Diversification Opportunities for Fevertree Drinks and OTP Bank

0.81

Correlation Coefficient

Fevertree Drinks  OTP Bank

Very poor diversification

The 3 months correlation between Fevertree and OTP is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks Plc and OTP Bank Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OTP Bank Nyrt and Fevertree Drinks 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 Fevertree Drinks Plc are associated (or correlated) with OTP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OTP Bank Nyrt has no effect on the direction of Fevertree Drinks i.e., Fevertree Drinks and OTP Bank go up and down completely randomly.

Pair Corralation between Fevertree Drinks and OTP Bank

If you would invest  88,100  in Fevertree Drinks Plc on April 7, 2025 and sell it today you would earn a total of  6,700  from holding Fevertree Drinks Plc or generate 7.6% return on investment over 90 days.

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

Fevertree Drinks Plc  vs.  OTP Bank Nyrt

Fevertree Drinks Plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fevertree Drinks Plc are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fevertree Drinks unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 unsteady basic indicators, OTP Bank may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Fevertree Drinks and OTP Bank

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

The idea behind Fevertree Drinks Plc and OTP Bank 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.