Correlation Between DBS Group and Erste Group
Can any of the company-specific risk be diversified away by investing in both DBS Group 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 DBS Group and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBS Group Holdings and Erste Group Bank, you can compare the effects of market volatilities on DBS Group 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 DBS Group with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBS Group and Erste Group.
Diversification Opportunities for DBS Group and Erste Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DBS and Erste is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding DBS Group Holdings 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 DBS Group 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 DBS Group Holdings 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 DBS Group i.e., DBS Group and Erste Group go up and down completely randomly.
Pair Corralation between DBS Group and Erste Group
Assuming the 90 days horizon DBS Group Holdings is expected to under-perform the Erste Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, DBS Group Holdings is 1.6 times less risky than Erste Group. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Erste Group Bank is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,874 in Erste Group Bank on October 9, 2024 and sell it today you would earn a total of 136.00 from holding Erste Group Bank or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DBS Group Holdings vs. Erste Group Bank
Performance |
| Timeline |
| DBS Group Holdings |
| Erste Group Bank |
DBS Group and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBS Group and Erste Group
The main advantage of trading using opposite DBS Group and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBS Group 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.| DBS Group vs. KBC Groep NV | DBS Group vs. United Overseas Bank | DBS Group vs. Embassy Bancorp | DBS Group vs. Overseas Chinese Banking |
| Erste Group vs. Eurobank Ergasias Services | Erste Group vs. Standard Bank Group | Erste Group vs. Bank Central Asia | Erste Group vs. PSB Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |