Correlation Between Erste Group and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Erste Group and CATLIN GROUP 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 CATLIN GROUP 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 CATLIN GROUP , you can compare the effects of market volatilities on Erste Group and CATLIN GROUP 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 CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and CATLIN GROUP.
Diversification Opportunities for Erste Group and CATLIN GROUP
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Erste and CATLIN is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN 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 CATLIN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATLIN GROUP has no effect on the direction of Erste Group i.e., Erste Group and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Erste Group and CATLIN GROUP
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 2.12 times more return on investment than CATLIN GROUP. However, Erste Group is 2.12 times more volatile than CATLIN GROUP . It trades about 0.22 of its potential returns per unit of risk. CATLIN GROUP is currently generating about -0.29 per unit of risk. If you would invest 5,884 in Erste Group Bank on October 22, 2024 and sell it today you would earn a total of 264.00 from holding Erste Group Bank or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Erste Group Bank vs. CATLIN GROUP
Performance |
| Timeline |
| Erste Group Bank |
| CATLIN GROUP |
Erste Group and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and CATLIN GROUP
The main advantage of trading using opposite Erste Group and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, CATLIN GROUP 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 CATLIN GROUP will offset losses from the drop in CATLIN GROUP's long position.| Erste Group vs. Medical Properties Trust | Erste Group vs. Roadside Real Estate | Erste Group vs. Broadridge Financial Solutions | Erste Group vs. Charter Communications Cl |
| CATLIN GROUP vs. JB Hunt Transport | CATLIN GROUP vs. Sydbank | CATLIN GROUP vs. Norman Broadbent Plc | CATLIN GROUP vs. Erste Group Bank |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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