Correlation Between AQUILA PART and Erste Group
Can any of the company-specific risk be diversified away by investing in both AQUILA PART 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 AQUILA PART and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AQUILA PART PROD and Erste Group Bank, you can compare the effects of market volatilities on AQUILA PART 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 AQUILA PART with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AQUILA PART and Erste Group.
Diversification Opportunities for AQUILA PART and Erste Group
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AQUILA and Erste is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding AQUILA PART PROD 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 AQUILA PART 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 AQUILA PART PROD 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 AQUILA PART i.e., AQUILA PART and Erste Group go up and down completely randomly.
Pair Corralation between AQUILA PART and Erste Group
Assuming the 90 days horizon AQUILA PART PROD is expected to generate 1.16 times more return on investment than Erste Group. However, AQUILA PART is 1.16 times more volatile than Erste Group Bank. It trades about 0.11 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.11 per unit of risk. If you would invest 70.00 in AQUILA PART PROD on August 29, 2024 and sell it today you would earn a total of 56.00 from holding AQUILA PART PROD or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AQUILA PART PROD vs. Erste Group Bank
Performance |
| Timeline |
| AQUILA PART PROD |
| Erste Group Bank |
AQUILA PART and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AQUILA PART and Erste Group
The main advantage of trading using opposite AQUILA PART and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AQUILA PART 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.| AQUILA PART vs. Digi Communications NV | AQUILA PART vs. IHUNT TECHNOLOGY IMPORT EXPORT | AQUILA PART vs. GRUPUL INDUSTRIAL ELECTROCONTACT | AQUILA PART vs. AROBS TRANSILVANIA SOFTWARE |
| Erste Group vs. TRANSILVANIA INVESTMENTS ALLIANCE | Erste Group vs. IHUNT TECHNOLOGY IMPORT EXPORT | Erste Group vs. Biofarm Bucure | Erste Group vs. Compania Hoteliera InterContinental |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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