Correlation Between COMBA TELECOM and Erste Group
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM 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 COMBA TELECOM and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMBA TELECOM SYST and Erste Group Bank, you can compare the effects of market volatilities on COMBA TELECOM 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 COMBA TELECOM with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Erste Group.
Diversification Opportunities for COMBA TELECOM and Erste Group
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COMBA and Erste is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST 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 COMBA TELECOM 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 COMBA TELECOM SYST 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 COMBA TELECOM i.e., COMBA TELECOM and Erste Group go up and down completely randomly.
Pair Corralation between COMBA TELECOM and Erste Group
Assuming the 90 days trading horizon COMBA TELECOM is expected to generate 2.0 times less return on investment than Erste Group. In addition to that, COMBA TELECOM is 4.39 times more volatile than Erste Group Bank. It trades about 0.02 of its total potential returns per unit of risk. Erste Group Bank is currently generating about 0.17 per unit of volatility. If you would invest 5,914 in Erste Group Bank on October 17, 2024 and sell it today you would earn a total of 184.00 from holding Erste Group Bank or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMBA TELECOM SYST vs. Erste Group Bank
Performance |
| Timeline |
| COMBA TELECOM SYST |
| Erste Group Bank |
COMBA TELECOM and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMBA TELECOM and Erste Group
The main advantage of trading using opposite COMBA TELECOM and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM 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.| COMBA TELECOM vs. WIZZ AIR HLDGUNSPADR4 | COMBA TELECOM vs. PARKEN Sport Entertainment | COMBA TELECOM vs. Transport International Holdings | COMBA TELECOM vs. SOEDER SPORTFISKE AB |
| Erste Group vs. Chunghwa Telecom Co | Erste Group vs. COMBA TELECOM SYST | Erste Group vs. CITIC Telecom International | Erste Group vs. Constellation Software |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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