Correlation Between Erste Group and Octopus Apollo
Can any of the company-specific risk be diversified away by investing in both Erste Group and Octopus Apollo 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 Octopus Apollo 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 Octopus Apollo VCT, you can compare the effects of market volatilities on Erste Group and Octopus Apollo 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 Octopus Apollo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Octopus Apollo.
Diversification Opportunities for Erste Group and Octopus Apollo
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Erste and Octopus is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Octopus Apollo VCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Octopus Apollo VCT 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 Octopus Apollo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Octopus Apollo VCT has no effect on the direction of Erste Group i.e., Erste Group and Octopus Apollo go up and down completely randomly.
Pair Corralation between Erste Group and Octopus Apollo
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 1.4 times more return on investment than Octopus Apollo. However, Erste Group is 1.4 times more volatile than Octopus Apollo VCT. It trades about 0.18 of its potential returns per unit of risk. Octopus Apollo VCT is currently generating about 0.02 per unit of risk. If you would invest 5,338 in Erste Group Bank on September 12, 2024 and sell it today you would earn a total of 242.00 from holding Erste Group Bank or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. Octopus Apollo VCT
Performance |
| Timeline |
| Erste Group Bank |
| Octopus Apollo VCT |
Erste Group and Octopus Apollo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Octopus Apollo
The main advantage of trading using opposite Erste Group and Octopus Apollo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Octopus Apollo 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 Octopus Apollo will offset losses from the drop in Octopus Apollo's long position.| Erste Group vs. Hong Kong Land | Erste Group vs. Neometals | Erste Group vs. Coor Service Management | Erste Group vs. Fidelity Sustainable USD |
| Octopus Apollo vs. Aeorema Communications Plc | Octopus Apollo vs. Spirent Communications plc | Octopus Apollo vs. Empire Metals Limited | Octopus Apollo vs. Zoom Video Communications |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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