Correlation Between Erste Group and Liaoning Port
Can any of the company-specific risk be diversified away by investing in both Erste Group and Liaoning Port 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 Erste Group and Liaoning Port into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erste Group Bank and Liaoning Port CoLtd, you can compare the effects of market volatilities on Erste Group and Liaoning Port 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 Erste Group with a short position of Liaoning Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Liaoning Port.
Diversification Opportunities for Erste Group and Liaoning Port
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Erste and Liaoning is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Liaoning Port CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Port CoLtd and Erste 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 Erste Group Bank are associated (or correlated) with Liaoning Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Port CoLtd has no effect on the direction of Erste Group i.e., Erste Group and Liaoning Port go up and down completely randomly.
Pair Corralation between Erste Group and Liaoning Port
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.74 times more return on investment than Liaoning Port. However, Erste Group Bank is 1.35 times less risky than Liaoning Port. It trades about 0.07 of its potential returns per unit of risk. Liaoning Port CoLtd is currently generating about 0.02 per unit of risk. If you would invest 5,854 in Erste Group Bank on November 3, 2024 and sell it today you would earn a total of 106.00 from holding Erste Group Bank or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. Liaoning Port CoLtd
Performance |
| Timeline |
| Erste Group Bank |
| Liaoning Port CoLtd |
Erste Group and Liaoning Port Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Liaoning Port
The main advantage of trading using opposite Erste Group and Liaoning Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Liaoning Port 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 Liaoning Port will offset losses from the drop in Liaoning Port's long position.| Erste Group vs. RCS MediaGroup SpA | Erste Group vs. BRIT AMER TOBACCO | Erste Group vs. TRAINLINE PLC LS | Erste Group vs. Hollywood Bowl Group |
| Liaoning Port vs. PennantPark Investment | Liaoning Port vs. DIVERSIFIED ROYALTY | Liaoning Port vs. MidCap Financial Investment | Liaoning Port vs. New China Life |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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