Correlation Between OTP Bank and Purecycle Technologies

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

Diversification Opportunities for OTP Bank and Purecycle Technologies

0.41
  Correlation Coefficient

Very weak diversification

The 3 months correlation between OTP and Purecycle is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding OTP Bank Nyrt and Purecycle Technologies Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purecycle 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 Purecycle Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purecycle Technologies has no effect on the direction of OTP Bank i.e., OTP Bank and Purecycle Technologies go up and down completely randomly.

Pair Corralation between OTP Bank and Purecycle Technologies

If you would invest  689.00  in Purecycle Technologies Holdings on December 29, 2023 and sell it today you would earn a total of  46.00  from holding Purecycle Technologies Holdings or generate 6.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy9.09%
ValuesDaily Returns

OTP Bank Nyrt  vs.  Purecycle Technologies Holding

 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 weak fundamental drivers, OTP Bank reported solid returns over the last few months and may actually be approaching a breakup point.
Purecycle Technologies 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Purecycle Technologies Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Purecycle Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

OTP Bank and Purecycle Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with OTP Bank and Purecycle Technologies

The main advantage of trading using opposite OTP Bank and Purecycle Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OTP Bank position performs unexpectedly, Purecycle 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 Purecycle Technologies will offset losses from the drop in Purecycle Technologies' long position.
The idea behind OTP Bank Nyrt and Purecycle Technologies Holdings 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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