Correlation Between Erste Group and Forsys Metals
Can any of the company-specific risk be diversified away by investing in both Erste Group and Forsys Metals 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 Forsys Metals 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 Forsys Metals Corp, you can compare the effects of market volatilities on Erste Group and Forsys Metals 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 Forsys Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Forsys Metals.
Diversification Opportunities for Erste Group and Forsys Metals
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Erste and Forsys is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Forsys Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forsys Metals Corp 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 Forsys Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forsys Metals Corp has no effect on the direction of Erste Group i.e., Erste Group and Forsys Metals go up and down completely randomly.
Pair Corralation between Erste Group and Forsys Metals
Assuming the 90 days trading horizon Erste Group is expected to generate 1.51 times less return on investment than Forsys Metals. But when comparing it to its historical volatility, Erste Group Bank is 3.77 times less risky than Forsys Metals. It trades about 0.1 of its potential returns per unit of risk. Forsys Metals Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 31.00 in Forsys Metals Corp on October 16, 2024 and sell it today you would earn a total of 12.00 from holding Forsys Metals Corp or generate 38.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Erste Group Bank vs. Forsys Metals Corp
Performance |
| Timeline |
| Erste Group Bank |
| Forsys Metals Corp |
Erste Group and Forsys Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Forsys Metals
The main advantage of trading using opposite Erste Group and Forsys Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Forsys Metals 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 Forsys Metals will offset losses from the drop in Forsys Metals' long position.| Erste Group vs. Sch Environnement SA | Erste Group vs. Lifeway Foods | Erste Group vs. EBRO FOODS | Erste Group vs. INDOFOOD AGRI RES |
| Forsys Metals vs. GRUPO CARSO A1 | Forsys Metals vs. GEELY AUTOMOBILE | Forsys Metals vs. CEOTRONICS | Forsys Metals vs. CeoTronics AG |
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.
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