Correlation Between Hollywood Bowl and Erste Group
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl 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 Hollywood Bowl and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hollywood Bowl Group and Erste Group Bank, you can compare the effects of market volatilities on Hollywood Bowl 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 Hollywood Bowl with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Erste Group.
Diversification Opportunities for Hollywood Bowl and Erste Group
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hollywood and Erste is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group 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 Hollywood Bowl 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 Hollywood Bowl Group 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 Hollywood Bowl i.e., Hollywood Bowl and Erste Group go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Erste Group
Assuming the 90 days trading horizon Hollywood Bowl is expected to generate 1.47 times less return on investment than Erste Group. In addition to that, Hollywood Bowl is 1.14 times more volatile than Erste Group Bank. It trades about 0.05 of its total potential returns per unit of risk. Erste Group Bank is currently generating about 0.08 per unit of volatility. If you would invest 5,164 in Erste Group Bank on September 4, 2024 and sell it today you would earn a total of 90.00 from holding Erste Group Bank or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hollywood Bowl Group vs. Erste Group Bank
Performance |
| Timeline |
| Hollywood Bowl Group |
| Erste Group Bank |
Hollywood Bowl and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and Erste Group
The main advantage of trading using opposite Hollywood Bowl and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl 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.| Hollywood Bowl vs. Samsung Electronics Co | Hollywood Bowl vs. Samsung Electronics Co | Hollywood Bowl vs. Hyundai Motor | Hollywood Bowl vs. Toyota Motor Corp |
| Erste Group vs. Samsung Electronics Co | Erste Group vs. Samsung Electronics Co | Erste Group vs. Hyundai Motor | Erste Group vs. Toyota Motor Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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