Correlation Between Erste Group and Alior Bank
Can any of the company-specific risk be diversified away by investing in both Erste Group and Alior Bank 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 Alior Bank 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 Alior Bank SA, you can compare the effects of market volatilities on Erste Group and Alior Bank 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 Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Alior Bank.
Diversification Opportunities for Erste Group and Alior Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Erste and Alior is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Alior Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alior Bank SA 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 Alior Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alior Bank SA has no effect on the direction of Erste Group i.e., Erste Group and Alior Bank go up and down completely randomly.
Pair Corralation between Erste Group and Alior Bank
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 381.41 times more return on investment than Alior Bank. However, Erste Group is 381.41 times more volatile than Alior Bank SA. It trades about 0.1 of its potential returns per unit of risk. Alior Bank SA is currently generating about 0.03 per unit of risk. If you would invest 2,530 in Erste Group Bank on August 30, 2024 and sell it today you would earn a total of 2,593 from holding Erste Group Bank or generate 102.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Erste Group Bank vs. Alior Bank SA
Performance |
| Timeline |
| Erste Group Bank |
| Alior Bank SA |
Erste Group and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Alior Bank
The main advantage of trading using opposite Erste Group and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Alior Bank 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 Alior Bank will offset losses from the drop in Alior Bank's long position.| Erste Group vs. Lendinvest PLC | Erste Group vs. Neometals | Erste Group vs. Albion Technology General | Erste Group vs. Jupiter Fund Management |
| Alior Bank vs. Toyota Motor Corp | Alior Bank vs. OTP Bank Nyrt | Alior Bank vs. Cognizant Technology Solutions | Alior Bank vs. Lendinvest PLC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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