Correlation Between Postal Savings and ERSTE GP
Can any of the company-specific risk be diversified away by investing in both Postal Savings and ERSTE GP 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 Postal Savings and ERSTE GP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Savings Bank and ERSTE GP BNK, you can compare the effects of market volatilities on Postal Savings and ERSTE GP 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 Postal Savings with a short position of ERSTE GP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and ERSTE GP.
Diversification Opportunities for Postal Savings and ERSTE GP
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Postal and ERSTE is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and ERSTE GP BNK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ERSTE GP BNK and Postal Savings 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 Postal Savings Bank are associated (or correlated) with ERSTE GP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ERSTE GP BNK has no effect on the direction of Postal Savings i.e., Postal Savings and ERSTE GP go up and down completely randomly.
Pair Corralation between Postal Savings and ERSTE GP
Assuming the 90 days horizon Postal Savings Bank is expected to generate 8.61 times more return on investment than ERSTE GP. However, Postal Savings is 8.61 times more volatile than ERSTE GP BNK. It trades about 0.26 of its potential returns per unit of risk. ERSTE GP BNK is currently generating about 0.16 per unit of risk. If you would invest 40.00 in Postal Savings Bank on October 22, 2024 and sell it today you would earn a total of 16.00 from holding Postal Savings Bank or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Savings Bank vs. ERSTE GP BNK
Performance |
| Timeline |
| Postal Savings Bank |
| ERSTE GP BNK |
Postal Savings and ERSTE GP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and ERSTE GP
The main advantage of trading using opposite Postal Savings and ERSTE GP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings position performs unexpectedly, ERSTE GP 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 GP will offset losses from the drop in ERSTE GP's long position.| Postal Savings vs. POSBO UNSPADRS20YC1 | Postal Savings vs. Truist Financial | Postal Savings vs. OVERSEA CHINUNSPADR2 | Postal Savings vs. Oversea Chinese Banking |
| ERSTE GP vs. Take Two Interactive Software | ERSTE GP vs. Marie Brizard Wine | ERSTE GP vs. AWILCO DRILLING PLC | ERSTE GP vs. Axway Software SA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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