Correlation Between Erste Group and Capital Drilling
Can any of the company-specific risk be diversified away by investing in both Erste Group and Capital Drilling 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 Capital Drilling 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 Capital Drilling, you can compare the effects of market volatilities on Erste Group and Capital Drilling 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 Capital Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Capital Drilling.
Diversification Opportunities for Erste Group and Capital Drilling
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Erste and Capital is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Capital Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Drilling 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 Capital Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Drilling has no effect on the direction of Erste Group i.e., Erste Group and Capital Drilling go up and down completely randomly.
Pair Corralation between Erste Group and Capital Drilling
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.35 times more return on investment than Capital Drilling. However, Erste Group Bank is 2.86 times less risky than Capital Drilling. It trades about 0.12 of its potential returns per unit of risk. Capital Drilling is currently generating about -0.12 per unit of risk. If you would invest 5,826 in Erste Group Bank on November 4, 2024 and sell it today you would earn a total of 164.00 from holding Erste Group Bank or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. Capital Drilling
Performance |
| Timeline |
| Erste Group Bank |
| Capital Drilling |
Erste Group and Capital Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Capital Drilling
The main advantage of trading using opposite Erste Group and Capital Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Capital Drilling 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 Capital Drilling will offset losses from the drop in Capital Drilling's long position.| Erste Group vs. Infrastrutture Wireless Italiane | Erste Group vs. Young Cos Brewery | Erste Group vs. Gaztransport et Technigaz | Erste Group vs. Alliance Data Systems |
| Capital Drilling vs. Golden Metal Resources | Capital Drilling vs. Wheaton Precious Metals | Capital Drilling vs. Jacquet Metal Service | Capital Drilling vs. Gaztransport et Technigaz |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |