Correlation Between OTP Bank and Cardano

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

Diversification Opportunities for OTP Bank and Cardano

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between OTP and Cardano is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Cardano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardano 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 Cardano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardano has no effect on the direction of OTP Bank i.e., OTP Bank and Cardano go up and down completely randomly.

Pair Corralation between OTP Bank and Cardano

If you would invest  66.00  in Cardano on December 30, 2023 and sell it today you would lose (1.00) from holding Cardano or give up 1.52% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy9.09%
ValuesDaily Returns

OTP Bank Nyrt  vs.  Cardano

 Performance 
       Timeline  
OTP Bank Nyrt 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Solid
Over the last 90 days OTP Bank Nyrt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain fundamental drivers, OTP Bank reported solid returns over the last few months and may actually be approaching a breakup point.
Cardano 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Cardano are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cardano exhibited solid returns over the last few months and may actually be approaching a breakup point.

OTP Bank and Cardano Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with OTP Bank and Cardano

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

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