Correlation Between G5 Entertainment and Erste Group
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment 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 G5 Entertainment and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G5 Entertainment AB and Erste Group Bank, you can compare the effects of market volatilities on G5 Entertainment 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 G5 Entertainment with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Erste Group.
Diversification Opportunities for G5 Entertainment and Erste Group
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 0QUS and Erste is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB 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 G5 Entertainment 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 G5 Entertainment AB 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 G5 Entertainment i.e., G5 Entertainment and Erste Group go up and down completely randomly.
Pair Corralation between G5 Entertainment and Erste Group
Assuming the 90 days trading horizon G5 Entertainment is expected to generate 1.45 times less return on investment than Erste Group. In addition to that, G5 Entertainment is 2.01 times more volatile than Erste Group Bank. It trades about 0.11 of its total potential returns per unit of risk. Erste Group Bank is currently generating about 0.32 per unit of volatility. If you would invest 5,540 in Erste Group Bank on October 11, 2024 and sell it today you would earn a total of 427.00 from holding Erste Group Bank or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
G5 Entertainment AB vs. Erste Group Bank
Performance |
| Timeline |
| G5 Entertainment |
| Erste Group Bank |
G5 Entertainment and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Erste Group
The main advantage of trading using opposite G5 Entertainment and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment 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.| G5 Entertainment vs. Waste Management | G5 Entertainment vs. JB Hunt Transport | G5 Entertainment vs. Roebuck Food Group | G5 Entertainment vs. Travel Leisure Co |
| Erste Group vs. G5 Entertainment AB | Erste Group vs. Grand Vision Media | Erste Group vs. JD Sports Fashion | Erste Group vs. Baker Steel Resources |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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