Correlation Between Otp Bank and Banco Latinoamericano

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

Diversification Opportunities for Otp Bank and Banco Latinoamericano

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between OTPBF and Banco is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Otp Bank and Banco Latinoamericano DE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Latinoamericano 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 Banco Latinoamericano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Latinoamericano has no effect on the direction of Otp Bank i.e., Otp Bank and Banco Latinoamericano go up and down completely randomly.

Pair Corralation between Otp Bank and Banco Latinoamericano

Assuming the 90 days horizon Otp Bank is expected to under-perform the Banco Latinoamericano. In addition to that, Otp Bank is 4.23 times more volatile than Banco Latinoamericano DE. It trades about -0.03 of its total potential returns per unit of risk. Banco Latinoamericano DE is currently generating about 0.04 per unit of volatility. If you would invest  1,126  in Banco Latinoamericano DE on May 9, 2022 and sell it today you would earn a total of  326.00  from holding Banco Latinoamericano DE or generate 28.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Otp Bank  vs.  Banco Latinoamericano DE

 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 uncertain 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

Banco Latinoamericano 
Banco Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Banco Latinoamericano DE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Banco Latinoamericano is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Banco Price Channel

Otp Bank and Banco Latinoamericano Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Otp Bank and Banco Latinoamericano

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

Otp Bank

Pair trading matchups for Otp Bank

The idea behind Otp Bank and Banco Latinoamericano DE 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.

Banco Latinoamericano DE

Pair trading matchups for Banco Latinoamericano

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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