Correlation Between Erste Group and Cembra Money
Can any of the company-specific risk be diversified away by investing in both Erste Group and Cembra Money 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 Cembra Money 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 Cembra Money Bank, you can compare the effects of market volatilities on Erste Group and Cembra Money 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 Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Cembra Money.
Diversification Opportunities for Erste Group and Cembra Money
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Erste and Cembra is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank 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 Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Erste Group i.e., Erste Group and Cembra Money go up and down completely randomly.
Pair Corralation between Erste Group and Cembra Money
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 1.31 times more return on investment than Cembra Money. However, Erste Group is 1.31 times more volatile than Cembra Money Bank. It trades about 0.15 of its potential returns per unit of risk. Cembra Money Bank is currently generating about 0.12 per unit of risk. If you would invest 3,369 in Erste Group Bank on September 12, 2024 and sell it today you would earn a total of 2,211 from holding Erste Group Bank or generate 65.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Erste Group Bank vs. Cembra Money Bank
Performance |
| Timeline |
| Erste Group Bank |
| Cembra Money Bank |
Erste Group and Cembra Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Cembra Money
The main advantage of trading using opposite Erste Group and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Cembra Money 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 Cembra Money will offset losses from the drop in Cembra Money's long position.| Erste Group vs. Hong Kong Land | Erste Group vs. Neometals | Erste Group vs. Coor Service Management | Erste Group vs. Fidelity Sustainable USD |
| Cembra Money vs. Hong Kong Land | Cembra Money vs. Neometals | Cembra Money vs. Coor Service Management | Cembra Money vs. Fidelity Sustainable USD |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |