Correlation Between Qurate Retail and Erste Group
Can any of the company-specific risk be diversified away by investing in both Qurate Retail and Erste Group 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 Qurate Retail and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qurate Retail Series and Erste Group Bank, you can compare the effects of market volatilities on Qurate Retail and Erste Group 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 Qurate Retail with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and Erste Group.
Diversification Opportunities for Qurate Retail and Erste Group
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Qurate and Erste is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank and Qurate Retail 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 Qurate Retail Series are associated (or correlated) with Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of Qurate Retail i.e., Qurate Retail and Erste Group go up and down completely randomly.
Pair Corralation between Qurate Retail and Erste Group
Assuming the 90 days trading horizon Qurate Retail Series is expected to under-perform the Erste Group. In addition to that, Qurate Retail is 5.43 times more volatile than Erste Group Bank. It trades about -0.11 of its total potential returns per unit of risk. Erste Group Bank is currently generating about 0.03 per unit of volatility. If you would invest 5,151 in Erste Group Bank on September 2, 2024 and sell it today you would earn a total of 30.00 from holding Erste Group Bank or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qurate Retail Series vs. Erste Group Bank
Performance |
| Timeline |
| Qurate Retail Series |
| Erste Group Bank |
Qurate Retail and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qurate Retail and Erste Group
The main advantage of trading using opposite Qurate Retail and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qurate Retail position performs unexpectedly, Erste Group 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 Erste Group will offset losses from the drop in Erste Group's long position.| Qurate Retail vs. Medical Properties Trust | Qurate Retail vs. Intuitive Investments Group | Qurate Retail vs. Smithson Investment Trust | Qurate Retail vs. Livermore Investments Group |
| Erste Group vs. LPKF Laser Electronics | Erste Group vs. Associated British Foods | Erste Group vs. Hilton Food Group | Erste Group vs. Samsung Electronics Co |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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