Correlation Between Erste Group and Patria Bank
Can any of the company-specific risk be diversified away by investing in both Erste Group and Patria Bank 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 Patria Bank 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 Patria Bank SA, you can compare the effects of market volatilities on Erste Group and Patria Bank 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 Patria Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Patria Bank.
Diversification Opportunities for Erste Group and Patria Bank
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Erste and Patria is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Patria Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patria Bank SA 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 Patria Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patria Bank SA has no effect on the direction of Erste Group i.e., Erste Group and Patria Bank go up and down completely randomly.
Pair Corralation between Erste Group and Patria Bank
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.91 times more return on investment than Patria Bank. However, Erste Group Bank is 1.1 times less risky than Patria Bank. It trades about 0.33 of its potential returns per unit of risk. Patria Bank SA is currently generating about 0.01 per unit of risk. If you would invest 24,380 in Erste Group Bank on October 25, 2024 and sell it today you would earn a total of 6,280 from holding Erste Group Bank or generate 25.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.25% |
| Values | Daily Returns |
Erste Group Bank vs. Patria Bank SA
Performance |
| Timeline |
| Erste Group Bank |
| Patria Bank SA |
Erste Group and Patria Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Patria Bank
The main advantage of trading using opposite Erste Group and Patria Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Patria Bank 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 Patria Bank will offset losses from the drop in Patria Bank's long position.| Erste Group vs. Turism Hotelur | Erste Group vs. Patria Bank SA | Erste Group vs. IM Vinaria Purcari | Erste Group vs. AROBS TRANSILVANIA SOFTWARE |
| Patria Bank vs. Turism Hotelur | Patria Bank vs. GRUPUL INDUSTRIAL ELECTROCONTACT | Patria Bank vs. Erste Group Bank | Patria Bank vs. TRANSILVANIA INVESTMENTS ALLIANCE |
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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