Correlation Between Erste Group and Antibiotice
Can any of the company-specific risk be diversified away by investing in both Erste Group and Antibiotice 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 Antibiotice 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 Antibiotice Ia, you can compare the effects of market volatilities on Erste Group and Antibiotice 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 Antibiotice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Antibiotice.
Diversification Opportunities for Erste Group and Antibiotice
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Erste and Antibiotice is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Antibiotice Ia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antibiotice Ia 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 Antibiotice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antibiotice Ia has no effect on the direction of Erste Group i.e., Erste Group and Antibiotice go up and down completely randomly.
Pair Corralation between Erste Group and Antibiotice
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.91 times more return on investment than Antibiotice. However, Erste Group Bank is 1.1 times less risky than Antibiotice. It trades about 0.27 of its potential returns per unit of risk. Antibiotice Ia is currently generating about -0.09 per unit of risk. If you would invest 29,450 in Erste Group Bank on October 24, 2024 and sell it today you would earn a total of 1,200 from holding Erste Group Bank or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. Antibiotice Ia
Performance |
| Timeline |
| Erste Group Bank |
| Antibiotice Ia |
Erste Group and Antibiotice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Antibiotice
The main advantage of trading using opposite Erste Group and Antibiotice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Antibiotice 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 Antibiotice will offset losses from the drop in Antibiotice's long position.| Erste Group vs. IHUNT TECHNOLOGY IMPORT EXPORT | Erste Group vs. Biofarm Bucure | Erste Group vs. Turism Hotelur | Erste Group vs. GRUPUL INDUSTRIAL ELECTROCONTACT |
| Antibiotice vs. Digi Communications NV | Antibiotice vs. IM Vinaria Purcari | Antibiotice vs. Safetech Innovations SA | Antibiotice vs. AROBS TRANSILVANIA SOFTWARE |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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