Correlation Between AROBS TRANSILVANIA and Erste Group
Can any of the company-specific risk be diversified away by investing in both AROBS TRANSILVANIA 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 AROBS TRANSILVANIA and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AROBS TRANSILVANIA SOFTWARE and Erste Group Bank, you can compare the effects of market volatilities on AROBS TRANSILVANIA 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 AROBS TRANSILVANIA with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AROBS TRANSILVANIA and Erste Group.
Diversification Opportunities for AROBS TRANSILVANIA and Erste Group
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AROBS and Erste is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding AROBS TRANSILVANIA SOFTWARE 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 AROBS TRANSILVANIA 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 AROBS TRANSILVANIA SOFTWARE 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 AROBS TRANSILVANIA i.e., AROBS TRANSILVANIA and Erste Group go up and down completely randomly.
Pair Corralation between AROBS TRANSILVANIA and Erste Group
Assuming the 90 days trading horizon AROBS TRANSILVANIA SOFTWARE is expected to under-perform the Erste Group. But the stock apears to be less risky and, when comparing its historical volatility, AROBS TRANSILVANIA SOFTWARE is 1.1 times less risky than Erste Group. The stock trades about -0.09 of its potential returns per unit of risk. The Erste Group Bank is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 16,634 in Erste Group Bank on August 27, 2024 and sell it today you would earn a total of 9,296 from holding Erste Group Bank or generate 55.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 64.68% |
| Values | Daily Returns |
AROBS TRANSILVANIA SOFTWARE vs. Erste Group Bank
Performance |
| Timeline |
| AROBS TRANSILVANIA |
| Erste Group Bank |
AROBS TRANSILVANIA and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AROBS TRANSILVANIA and Erste Group
The main advantage of trading using opposite AROBS TRANSILVANIA and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AROBS TRANSILVANIA 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.| AROBS TRANSILVANIA vs. Bermas SA | AROBS TRANSILVANIA vs. Remarul 16 Februarie | AROBS TRANSILVANIA vs. Norofert SA | AROBS TRANSILVANIA vs. Biofarm Bucure |
| Erste Group vs. AROBS TRANSILVANIA SOFTWARE | Erste Group vs. Biofarm Bucure | Erste Group vs. Digi Communications NV | Erste Group vs. GRUPUL INDUSTRIAL ELECTROCONTACT |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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