Correlation Between Otp Bank and Focused Dynamic

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Can any of the company-specific risk be diversified away by investing in both Otp Bank and Focused Dynamic 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 Focused Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otp Bank and Focused Dynamic Growth, you can compare the effects of market volatilities on Otp Bank and Focused Dynamic 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 Focused Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Otp Bank and Focused Dynamic.

Diversification Opportunities for Otp Bank and Focused Dynamic

0.06
  Correlation Coefficient

Significant diversification

The 3 months correlation between OTPBF and Focused is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Otp Bank and Focused Dynamic Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focused Dynamic Growth 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 are associated (or correlated) with Focused Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focused Dynamic Growth has no effect on the direction of Otp Bank i.e., Otp Bank and Focused Dynamic go up and down completely randomly.

Pair Corralation between Otp Bank and Focused Dynamic

Assuming the 90 days horizon Otp Bank is expected to under-perform the Focused Dynamic. In addition to that, Otp Bank is 1.48 times more volatile than Focused Dynamic Growth. It trades about -0.27 of its total potential returns per unit of risk. Focused Dynamic Growth is currently generating about 0.37 per unit of volatility. If you would invest  3,926  in Focused Dynamic Growth on May 13, 2022 and sell it today you would earn a total of  563.00  from holding Focused Dynamic Growth or generate 14.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Otp Bank  vs.  Focused Dynamic Growth

 Performance (%) 
       Timeline  
Otp Bank 
OTPBF Performance
0 of 100
Over the last 90 days Otp Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in September 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

OTPBF Price Channel

Focused Dynamic Growth 
Focused Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Focused Dynamic Growth are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Focused Dynamic may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Focused Price Channel

Otp Bank and Focused Dynamic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Otp Bank and Focused Dynamic

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

Otp Bank

Pair trading matchups for Otp Bank

The idea behind Otp Bank and Focused Dynamic Growth 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.

Focused Dynamic Growth

Pair trading matchups for Focused Dynamic

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Focused Dynamic as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Focused Dynamic's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Focused Dynamic's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Focused Dynamic Growth.
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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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