Correlation Between Erste Group and Penta Ocean
Can any of the company-specific risk be diversified away by investing in both Erste Group and Penta Ocean 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 Penta Ocean 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 Penta Ocean Construction Co, you can compare the effects of market volatilities on Erste Group and Penta Ocean 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 Penta Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Penta Ocean.
Diversification Opportunities for Erste Group and Penta Ocean
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Erste and Penta is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Penta Ocean Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta Ocean Construc 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 Penta Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penta Ocean Construc has no effect on the direction of Erste Group i.e., Erste Group and Penta Ocean go up and down completely randomly.
Pair Corralation between Erste Group and Penta Ocean
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 1.28 times more return on investment than Penta Ocean. However, Erste Group is 1.28 times more volatile than Penta Ocean Construction Co. It trades about 0.08 of its potential returns per unit of risk. Penta Ocean Construction Co is currently generating about 0.0 per unit of risk. If you would invest 5,836 in Erste Group Bank on November 4, 2024 and sell it today you would earn a total of 124.00 from holding Erste Group Bank or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Erste Group Bank vs. Penta Ocean Construction Co
Performance |
| Timeline |
| Erste Group Bank |
| Penta Ocean Construc |
Erste Group and Penta Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Penta Ocean
The main advantage of trading using opposite Erste Group and Penta Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Penta Ocean 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 Penta Ocean will offset losses from the drop in Penta Ocean's long position.| Erste Group vs. T MOBILE US | Erste Group vs. Highlight Communications AG | Erste Group vs. ANTA SPORTS PRODUCT | Erste Group vs. Air Transport Services |
| Penta Ocean vs. Caseys General Stores | Penta Ocean vs. Fast Retailing Co | Penta Ocean vs. SEI INVESTMENTS | Penta Ocean vs. H2O Retailing |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |