Correlation Between Erste Group and Stanley Electric
Can any of the company-specific risk be diversified away by investing in both Erste Group and Stanley Electric 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 Stanley Electric 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 Stanley Electric Co, you can compare the effects of market volatilities on Erste Group and Stanley Electric 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 Stanley Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Stanley Electric.
Diversification Opportunities for Erste Group and Stanley Electric
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Erste and Stanley is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Stanley Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Electric 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 Stanley Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Electric has no effect on the direction of Erste Group i.e., Erste Group and Stanley Electric go up and down completely randomly.
Pair Corralation between Erste Group and Stanley Electric
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 1.04 times more return on investment than Stanley Electric. However, Erste Group is 1.04 times more volatile than Stanley Electric Co. It trades about 0.21 of its potential returns per unit of risk. Stanley Electric Co is currently generating about -0.13 per unit of risk. If you would invest 5,792 in Erste Group Bank on October 13, 2024 and sell it today you would earn a total of 232.00 from holding Erste Group Bank or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. Stanley Electric Co
Performance |
| Timeline |
| Erste Group Bank |
| Stanley Electric |
Erste Group and Stanley Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Stanley Electric
The main advantage of trading using opposite Erste Group and Stanley Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Stanley Electric 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 Stanley Electric will offset losses from the drop in Stanley Electric's long position.| Erste Group vs. Scottish Mortgage Investment | Erste Group vs. Japan Asia Investment | Erste Group vs. Ultra Clean Holdings | Erste Group vs. FIRST SAVINGS FINL |
| Stanley Electric vs. MTY Food Group | Stanley Electric vs. REVO INSURANCE SPA | Stanley Electric vs. URBAN OUTFITTERS | Stanley Electric vs. Erste Group Bank |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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