Correlation Between OTP Bank and China Pacific
Can any of the company-specific risk be diversified away by investing in both OTP Bank and China Pacific 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 China Pacific 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 China Pacific Insurance, you can compare the effects of market volatilities on OTP Bank and China Pacific 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 China Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of OTP Bank and China Pacific.
Diversification Opportunities for OTP Bank and China Pacific
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between OTP and China is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and China Pacific Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Pacific Insurance 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 China Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Pacific Insurance has no effect on the direction of OTP Bank i.e., OTP Bank and China Pacific go up and down completely randomly.
Pair Corralation between OTP Bank and China Pacific
Assuming the 90 days trading horizon OTP Bank is expected to generate 1.18 times less return on investment than China Pacific. In addition to that, OTP Bank is 1.81 times more volatile than China Pacific Insurance. It trades about 0.02 of its total potential returns per unit of risk. China Pacific Insurance is currently generating about 0.04 per unit of volatility. If you would invest 1,389 in China Pacific Insurance on June 18, 2024 and sell it today you would earn a total of 511.00 from holding China Pacific Insurance or generate 36.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
OTP Bank Nyrt vs. China Pacific Insurance
Performance |
Timeline |
OTP Bank Nyrt |
China Pacific Insurance |
OTP Bank and China Pacific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with OTP Bank and China Pacific
The main advantage of trading using opposite OTP Bank and China Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, China Pacific 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 China Pacific will offset losses from the drop in China Pacific's long position.OTP Bank vs. Hyundai Motor | OTP Bank vs. Samsung Electronics Co | OTP Bank vs. Samsung Electronics Co | OTP Bank vs. Halyk Bank of |
China Pacific vs. Cognizant Technology Solutions | China Pacific vs. Lendinvest PLC | China Pacific vs. Neometals | China Pacific vs. Coor Service Management |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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