Correlation Between Erste Group and PATTIES FOODS
Can any of the company-specific risk be diversified away by investing in both Erste Group and PATTIES FOODS 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 PATTIES FOODS 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 PATTIES FOODS , you can compare the effects of market volatilities on Erste Group and PATTIES FOODS 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 PATTIES FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and PATTIES FOODS.
Diversification Opportunities for Erste Group and PATTIES FOODS
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Erste and PATTIES is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and PATTIES FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PATTIES FOODS 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 PATTIES FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PATTIES FOODS has no effect on the direction of Erste Group i.e., Erste Group and PATTIES FOODS go up and down completely randomly.
Pair Corralation between Erste Group and PATTIES FOODS
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.3 times more return on investment than PATTIES FOODS. However, Erste Group Bank is 3.37 times less risky than PATTIES FOODS. It trades about 0.1 of its potential returns per unit of risk. PATTIES FOODS is currently generating about 0.0 per unit of risk. If you would invest 3,207 in Erste Group Bank on October 30, 2024 and sell it today you would earn a total of 3,023 from holding Erste Group Bank or generate 94.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.8% |
| Values | Daily Returns |
Erste Group Bank vs. PATTIES FOODS
Performance |
| Timeline |
| Erste Group Bank |
| PATTIES FOODS |
Erste Group and PATTIES FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and PATTIES FOODS
The main advantage of trading using opposite Erste Group and PATTIES FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, PATTIES FOODS 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 PATTIES FOODS will offset losses from the drop in PATTIES FOODS's long position.| Erste Group vs. Apple Inc | Erste Group vs. Apple Inc | Erste Group vs. Apple Inc | Erste Group vs. Apple Inc |
| PATTIES FOODS vs. Eisai Co | PATTIES FOODS vs. Teva Pharmaceutical Industries | PATTIES FOODS vs. Ipsen SA | PATTIES FOODS vs. Dr Reddys Laboratories |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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