Correlation Between Erste Group and Atresmedia
Can any of the company-specific risk be diversified away by investing in both Erste Group and Atresmedia 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 Erste Group and Atresmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erste Group Bank and Atresmedia, you can compare the effects of market volatilities on Erste Group and Atresmedia 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 Erste Group with a short position of Atresmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Atresmedia.
Diversification Opportunities for Erste Group and Atresmedia
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Erste and Atresmedia is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Atresmedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia and Erste Group 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 Erste Group Bank are associated (or correlated) with Atresmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia has no effect on the direction of Erste Group i.e., Erste Group and Atresmedia go up and down completely randomly.
Pair Corralation between Erste Group and Atresmedia
Assuming the 90 days trading horizon Erste Group is expected to generate 1.63 times less return on investment than Atresmedia. In addition to that, Erste Group is 1.05 times more volatile than Atresmedia. It trades about 0.08 of its total potential returns per unit of risk. Atresmedia is currently generating about 0.13 per unit of volatility. If you would invest 442.00 in Atresmedia on September 4, 2024 and sell it today you would earn a total of 13.00 from holding Atresmedia or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. Atresmedia
Performance |
| Timeline |
| Erste Group Bank |
| Atresmedia |
Erste Group and Atresmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Atresmedia
The main advantage of trading using opposite Erste Group and Atresmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Atresmedia 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 Atresmedia will offset losses from the drop in Atresmedia's long position.| Erste Group vs. Samsung Electronics Co | Erste Group vs. Samsung Electronics Co | Erste Group vs. Hyundai Motor | Erste Group vs. Toyota Motor Corp |
| Atresmedia vs. Samsung Electronics Co | Atresmedia vs. Samsung Electronics Co | Atresmedia vs. Hyundai Motor | Atresmedia vs. Toyota Motor Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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