Correlation Between MOL Hungarian and GSTechnologies

Can any of the company-specific risk be diversified away by investing in both MOL Hungarian and GSTechnologies 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 MOL Hungarian and GSTechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MOL Hungarian Oil and GSTechnologies, you can compare the effects of market volatilities on MOL Hungarian and GSTechnologies 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 MOL Hungarian with a short position of GSTechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOL Hungarian and GSTechnologies.

Diversification Opportunities for MOL Hungarian and GSTechnologies

-0.02

Correlation Coefficient

MOL Hungarian  GSTechnologies

Good diversification

The 3 months correlation between MOL and GSTechnologies is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding MOL Hungarian Oil and GSTechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSTechnologies and MOL Hungarian 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 MOL Hungarian Oil are associated (or correlated) with GSTechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSTechnologies has no effect on the direction of MOL Hungarian i.e., MOL Hungarian and GSTechnologies go up and down completely randomly.

Pair Corralation between MOL Hungarian and GSTechnologies

If you would invest  133.00  in GSTechnologies on September 29, 2024 and sell it today you would earn a total of  87.00  from holding GSTechnologies or generate 65.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

MOL Hungarian Oil  vs.  GSTechnologies

MOL Hungarian Oil

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MOL Hungarian Oil are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MOL Hungarian is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

GSTechnologies

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GSTechnologies are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GSTechnologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MOL Hungarian and GSTechnologies

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

The idea behind MOL Hungarian Oil and GSTechnologies 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..