Correlation Between Alior Bank and Erste Group
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Erste 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 Alior Bank and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alior Bank SA and Erste Group Bank, you can compare the effects of market volatilities on Alior Bank and Erste 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 Alior Bank with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Erste Group.
Diversification Opportunities for Alior Bank and Erste Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alior and Erste is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank and Alior Bank 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 Alior Bank SA are associated (or correlated) with Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of Alior Bank i.e., Alior Bank and Erste Group go up and down completely randomly.
Pair Corralation between Alior Bank and Erste Group
Assuming the 90 days trading horizon Alior Bank is expected to generate 1532.0 times less return on investment than Erste Group. But when comparing it to its historical volatility, Alior Bank SA is 381.41 times less risky than Erste Group. It trades about 0.03 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,530 in Erste Group Bank on August 30, 2024 and sell it today you would earn a total of 2,593 from holding Erste Group Bank or generate 102.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Alior Bank SA vs. Erste Group Bank
Performance |
| Timeline |
| Alior Bank SA |
| Erste Group Bank |
Alior Bank and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Erste Group
The main advantage of trading using opposite Alior Bank and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Erste 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 Erste Group will offset losses from the drop in Erste Group's long position.| Alior Bank vs. Toyota Motor Corp | Alior Bank vs. OTP Bank Nyrt | Alior Bank vs. Cognizant Technology Solutions | Alior Bank vs. Lendinvest PLC |
| Erste Group vs. Lendinvest PLC | Erste Group vs. Neometals | Erste Group vs. Albion Technology General | Erste Group vs. Jupiter Fund Management |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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