Correlation Between OTP Bank and Ingen Technologies
Can any of the company-specific risk be diversified away by investing in both OTP Bank and Ingen Technologies 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 Ingen Technologies 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 Ingen Technologies, you can compare the effects of market volatilities on OTP Bank and Ingen Technologies 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 Ingen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and Ingen Technologies.
Diversification Opportunities for OTP Bank and Ingen Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between OTP and Ingen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Ingen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingen Technologies 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 Ingen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingen Technologies has no effect on the direction of OTP Bank i.e., OTP Bank and Ingen Technologies go up and down completely randomly.
Pair Corralation between OTP Bank and Ingen Technologies
Assuming the 90 days horizon OTP Bank is expected to generate 80.2 times less return on investment than Ingen Technologies. But when comparing it to its historical volatility, OTP Bank Nyrt is 28.11 times less risky than Ingen Technologies. It trades about 0.04 of its potential returns per unit of risk. Ingen Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Ingen Technologies on December 30, 2023 and sell it today you would lose (0.01) from holding Ingen Technologies or give up 100.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 90.87% |
Values | Daily Returns |
OTP Bank Nyrt vs. Ingen Technologies
Performance |
Timeline |
OTP Bank Nyrt |
Risk-Adjusted Performance
0 of 100
Low | High |
Solid
Ingen Technologies |
OTP Bank and Ingen Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with OTP Bank and Ingen Technologies
The main advantage of trading using opposite OTP Bank and Ingen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Ingen Technologies 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 Ingen Technologies will offset losses from the drop in Ingen Technologies' long position.The idea behind OTP Bank Nyrt and Ingen Technologies 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.Ingen Technologies vs. Abbott Laboratories | Ingen Technologies vs. Stryker | Ingen Technologies vs. Medtronic PLC | Ingen Technologies vs. Boston Scientific Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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