Correlation Between Erste Group and Team Internet
Can any of the company-specific risk be diversified away by investing in both Erste Group and Team Internet 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 Team Internet 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 Team Internet Group, you can compare the effects of market volatilities on Erste Group and Team Internet 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 Team Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Team Internet.
Diversification Opportunities for Erste Group and Team Internet
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Erste and Team is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Team Internet Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Team Internet 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 Team Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Team Internet Group has no effect on the direction of Erste Group i.e., Erste Group and Team Internet go up and down completely randomly.
Pair Corralation between Erste Group and Team Internet
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.64 times more return on investment than Team Internet. However, Erste Group Bank is 1.56 times less risky than Team Internet. It trades about 0.31 of its potential returns per unit of risk. Team Internet Group is currently generating about 0.04 per unit of risk. If you would invest 5,463 in Erste Group Bank on October 9, 2024 and sell it today you would earn a total of 370.00 from holding Erste Group Bank or generate 6.77% 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. Team Internet Group
Performance |
| Timeline |
| Erste Group Bank |
| Team Internet Group |
Erste Group and Team Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Team Internet
The main advantage of trading using opposite Erste Group and Team Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Team Internet 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 Team Internet will offset losses from the drop in Team Internet's long position.| Erste Group vs. Walmart | Erste Group vs. BYD Co | Erste Group vs. Volkswagen AG | Erste Group vs. Volkswagen AG Non Vtg |
| Team Internet vs. Celebrus Technologies plc | Team Internet vs. Sartorius Stedim Biotech | Team Internet vs. Pressure Technologies Plc | Team Internet vs. Concurrent Technologies 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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