Correlation Between Erste Group and Alumil Rom
Can any of the company-specific risk be diversified away by investing in both Erste Group and Alumil Rom 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 Alumil Rom 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 Alumil Rom Industry, you can compare the effects of market volatilities on Erste Group and Alumil Rom 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 Alumil Rom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Alumil Rom.
Diversification Opportunities for Erste Group and Alumil Rom
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Erste and Alumil is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Alumil Rom Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumil Rom Industry 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 Alumil Rom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumil Rom Industry has no effect on the direction of Erste Group i.e., Erste Group and Alumil Rom go up and down completely randomly.
Pair Corralation between Erste Group and Alumil Rom
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.35 times more return on investment than Alumil Rom. However, Erste Group Bank is 2.89 times less risky than Alumil Rom. It trades about 0.11 of its potential returns per unit of risk. Alumil Rom Industry is currently generating about -0.03 per unit of risk. If you would invest 26,680 in Erste Group Bank on September 12, 2024 and sell it today you would earn a total of 770.00 from holding Erste Group Bank or generate 2.89% 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. Alumil Rom Industry
Performance |
| Timeline |
| Erste Group Bank |
| Alumil Rom Industry |
Erste Group and Alumil Rom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Alumil Rom
The main advantage of trading using opposite Erste Group and Alumil Rom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Alumil Rom 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 Alumil Rom will offset losses from the drop in Alumil Rom's long position.| Erste Group vs. IHUNT TECHNOLOGY IMPORT EXPORT | Erste Group vs. GRUPUL INDUSTRIAL ELECTROCONTACT | Erste Group vs. Evergent Investments SA | Erste Group vs. TRANSILVANIA LEASING SI |
| Alumil Rom vs. Oil Terminal C | Alumil Rom vs. Antibiotice Ia | Alumil Rom vs. Aages SA | Alumil Rom vs. Alro Slatina |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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