Correlation Between Erste Group and ACS Actividades
Can any of the company-specific risk be diversified away by investing in both Erste Group and ACS Actividades 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 ACS Actividades 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 ACS Actividades de, you can compare the effects of market volatilities on Erste Group and ACS Actividades 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 ACS Actividades. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and ACS Actividades.
Diversification Opportunities for Erste Group and ACS Actividades
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Erste and ACS is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and ACS Actividades de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACS Actividades de 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 ACS Actividades. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACS Actividades de has no effect on the direction of Erste Group i.e., Erste Group and ACS Actividades go up and down completely randomly.
Pair Corralation between Erste Group and ACS Actividades
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 1.57 times more return on investment than ACS Actividades. However, Erste Group is 1.57 times more volatile than ACS Actividades de. It trades about 0.13 of its potential returns per unit of risk. ACS Actividades de is currently generating about -0.18 per unit of risk. If you would invest 4,964 in Erste Group Bank on August 23, 2024 and sell it today you would earn a total of 236.00 from holding Erste Group Bank or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. ACS Actividades de
Performance |
| Timeline |
| Erste Group Bank |
| ACS Actividades de |
Erste Group and ACS Actividades Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and ACS Actividades
The main advantage of trading using opposite Erste Group and ACS Actividades positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, ACS Actividades 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 ACS Actividades will offset losses from the drop in ACS Actividades' long position.| Erste Group vs. Raiffeisen Bank International | Erste Group vs. OMV Aktiengesellschaft | Erste Group vs. Voestalpine AG | Erste Group vs. Vienna Insurance Group |
| ACS Actividades vs. Universal Music Group | ACS Actividades vs. Erste Group Bank | ACS Actividades vs. AMAG Austria Metall | ACS Actividades vs. Vienna Insurance Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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