Correlation Between Erste Group and T Mobile
Can any of the company-specific risk be diversified away by investing in both Erste Group and T Mobile 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 T Mobile 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 T Mobile, you can compare the effects of market volatilities on Erste Group and T Mobile 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 T Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and T Mobile.
Diversification Opportunities for Erste Group and T Mobile
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Erste and 0R2L is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile 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 T Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of Erste Group i.e., Erste Group and T Mobile go up and down completely randomly.
Pair Corralation between Erste Group and T Mobile
Assuming the 90 days trading horizon Erste Group is expected to generate 175.83 times less return on investment than T Mobile. But when comparing it to its historical volatility, Erste Group Bank is 71.34 times less risky than T Mobile. It trades about 0.07 of its potential returns per unit of risk. T Mobile is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 22,276 in T Mobile on September 1, 2024 and sell it today you would earn a total of 2,418 from holding T Mobile or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Erste Group Bank vs. T Mobile
Performance |
| Timeline |
| Erste Group Bank |
| T Mobile |
Erste Group and T Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and T Mobile
The main advantage of trading using opposite Erste Group and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, T Mobile 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 T Mobile will offset losses from the drop in T Mobile's long position.| Erste Group vs. Norman Broadbent Plc | Erste Group vs. Hochschild Mining plc | Erste Group vs. Endeavour Mining Corp | Erste Group vs. McEwen Mining |
| T Mobile vs. Intuitive Investments Group | T Mobile vs. Discover Financial Services | T Mobile vs. Bankers Investment Trust | T Mobile vs. Sydbank |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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