Correlation Between Erste Group and Eclectic Bar
Can any of the company-specific risk be diversified away by investing in both Erste Group and Eclectic Bar 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 Eclectic Bar 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 Eclectic Bar Group, you can compare the effects of market volatilities on Erste Group and Eclectic Bar 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 Eclectic Bar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Eclectic Bar.
Diversification Opportunities for Erste Group and Eclectic Bar
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Erste and Eclectic is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Eclectic Bar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eclectic Bar Group 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 Eclectic Bar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eclectic Bar Group has no effect on the direction of Erste Group i.e., Erste Group and Eclectic Bar go up and down completely randomly.
Pair Corralation between Erste Group and Eclectic Bar
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 10.78 times more return on investment than Eclectic Bar. However, Erste Group is 10.78 times more volatile than Eclectic Bar Group. It trades about 0.19 of its potential returns per unit of risk. Eclectic Bar Group is currently generating about 0.25 per unit of risk. If you would invest 5,463 in Erste Group Bank on November 7, 2024 and sell it today you would earn a total of 490.00 from holding Erste Group Bank or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. Eclectic Bar Group
Performance |
| Timeline |
| Erste Group Bank |
| Eclectic Bar Group |
Erste Group and Eclectic Bar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Eclectic Bar
The main advantage of trading using opposite Erste Group and Eclectic Bar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Eclectic Bar 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 Eclectic Bar will offset losses from the drop in Eclectic Bar's long position.| Erste Group vs. Geely Automobile Holdings | Erste Group vs. Supermarket Income REIT | Erste Group vs. Pressure Technologies Plc | Erste Group vs. TechnipFMC PLC |
| Eclectic Bar vs. Bank of Ireland | Eclectic Bar vs. Nordea Bank Abp | Eclectic Bar vs. St Galler Kantonalbank | Eclectic Bar vs. Tatton Asset Management |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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