Correlation Between DAIDO METAL and Erste Group
Can any of the company-specific risk be diversified away by investing in both DAIDO METAL 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 DAIDO METAL and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAIDO METAL TD and Erste Group Bank, you can compare the effects of market volatilities on DAIDO METAL 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 DAIDO METAL with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAIDO METAL and Erste Group.
Diversification Opportunities for DAIDO METAL and Erste Group
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DAIDO and Erste is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding DAIDO METAL TD 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 DAIDO METAL 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 DAIDO METAL TD 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 DAIDO METAL i.e., DAIDO METAL and Erste Group go up and down completely randomly.
Pair Corralation between DAIDO METAL and Erste Group
Assuming the 90 days horizon DAIDO METAL TD is expected to under-perform the Erste Group. In addition to that, DAIDO METAL is 1.03 times more volatile than Erste Group Bank. It trades about -0.15 of its total potential returns per unit of risk. Erste Group Bank is currently generating about 0.26 per unit of volatility. If you would invest 5,908 in Erste Group Bank on October 30, 2024 and sell it today you would earn a total of 322.00 from holding Erste Group Bank or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAIDO METAL TD vs. Erste Group Bank
Performance |
| Timeline |
| DAIDO METAL TD |
| Erste Group Bank |
DAIDO METAL and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAIDO METAL and Erste Group
The main advantage of trading using opposite DAIDO METAL and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAIDO METAL 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.| DAIDO METAL vs. CarsalesCom | DAIDO METAL vs. SALESFORCE INC CDR | DAIDO METAL vs. CHRYSALIS INVESTMENTS LTD | DAIDO METAL vs. Carsales |
| Erste Group vs. Apple Inc | Erste Group vs. Apple Inc | Erste Group vs. Apple Inc | Erste Group vs. Apple Inc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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