Correlation Between Erste Group and Bytes Technology
Can any of the company-specific risk be diversified away by investing in both Erste Group and Bytes Technology 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 Bytes Technology 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 Bytes Technology, you can compare the effects of market volatilities on Erste Group and Bytes Technology 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 Bytes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Bytes Technology.
Diversification Opportunities for Erste Group and Bytes Technology
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Erste and Bytes is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Bytes Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bytes Technology 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 Bytes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bytes Technology has no effect on the direction of Erste Group i.e., Erste Group and Bytes Technology go up and down completely randomly.
Pair Corralation between Erste Group and Bytes Technology
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.71 times more return on investment than Bytes Technology. However, Erste Group Bank is 1.4 times less risky than Bytes Technology. It trades about 0.41 of its potential returns per unit of risk. Bytes Technology is currently generating about -0.09 per unit of risk. If you would invest 5,146 in Erste Group Bank on October 26, 2024 and sell it today you would earn a total of 1,030 from holding Erste Group Bank or generate 20.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. Bytes Technology
Performance |
| Timeline |
| Erste Group Bank |
| Bytes Technology |
Erste Group and Bytes Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Bytes Technology
The main advantage of trading using opposite Erste Group and Bytes Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Bytes Technology 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 Bytes Technology will offset losses from the drop in Bytes Technology's long position.| Erste Group vs. Berkshire Hathaway | Erste Group vs. Samsung Electronics Co | Erste Group vs. Samsung Electronics Co | Erste Group vs. Chocoladefabriken Lindt Spruengli |
| Bytes Technology vs. FC Investment Trust | Bytes Technology vs. Monks Investment Trust | Bytes Technology vs. Evolution Gaming Group | Bytes Technology vs. Gaming Realms 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |