Correlation Between Erste Group and Hemogenyx Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Erste Group and Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals PLC, you can compare the effects of market volatilities on Erste Group and Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Hemogenyx Pharmaceuticals.
Diversification Opportunities for Erste Group and Hemogenyx Pharmaceuticals
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Erste and Hemogenyx is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Hemogenyx Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemogenyx Pharmaceuticals has no effect on the direction of Erste Group i.e., Erste Group and Hemogenyx Pharmaceuticals go up and down completely randomly.
Pair Corralation between Erste Group and Hemogenyx Pharmaceuticals
Assuming the 90 days trading horizon Erste Group is expected to generate 13.07 times less return on investment than Hemogenyx Pharmaceuticals. But when comparing it to its historical volatility, Erste Group Bank is 31.24 times less risky than Hemogenyx Pharmaceuticals. It trades about 0.09 of its potential returns per unit of risk. Hemogenyx Pharmaceuticals PLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 95,000 in Hemogenyx Pharmaceuticals PLC on November 5, 2024 and sell it today you would lose (58,550) from holding Hemogenyx Pharmaceuticals PLC or give up 61.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Erste Group Bank vs. Hemogenyx Pharmaceuticals PLC
Performance |
| Timeline |
| Erste Group Bank |
| Hemogenyx Pharmaceuticals |
Erste Group and Hemogenyx Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Hemogenyx Pharmaceuticals
The main advantage of trading using opposite Erste Group and Hemogenyx Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals will offset losses from the drop in Hemogenyx Pharmaceuticals' long position.| Erste Group vs. United Airlines Holdings | Erste Group vs. Edinburgh Investment Trust | Erste Group vs. Bankers Investment Trust | Erste Group vs. Smithson Investment Trust |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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