Correlation Between Erste Group and CA Immobilien
Can any of the company-specific risk be diversified away by investing in both Erste Group and CA Immobilien 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 CA Immobilien 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 CA Immobilien Anlagen, you can compare the effects of market volatilities on Erste Group and CA Immobilien 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 CA Immobilien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and CA Immobilien.
Diversification Opportunities for Erste Group and CA Immobilien
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Erste and CAI is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and CA Immobilien Anlagen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CA Immobilien Anlagen 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 CA Immobilien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CA Immobilien Anlagen has no effect on the direction of Erste Group i.e., Erste Group and CA Immobilien go up and down completely randomly.
Pair Corralation between Erste Group and CA Immobilien
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.98 times more return on investment than CA Immobilien. However, Erste Group Bank is 1.02 times less risky than CA Immobilien. It trades about 0.12 of its potential returns per unit of risk. CA Immobilien Anlagen is currently generating about -0.22 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 210.00 from holding Erste Group Bank or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. CA Immobilien Anlagen
Performance |
| Timeline |
| Erste Group Bank |
| CA Immobilien Anlagen |
Erste Group and CA Immobilien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and CA Immobilien
The main advantage of trading using opposite Erste Group and CA Immobilien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, CA Immobilien 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 CA Immobilien will offset losses from the drop in CA Immobilien's long position.| Erste Group vs. Raiffeisen Bank International | Erste Group vs. OMV Aktiengesellschaft | Erste Group vs. Voestalpine AG | Erste Group vs. Vienna Insurance Group |
| CA Immobilien vs. IMMOFINANZ AG | CA Immobilien vs. S IMMO AG | CA Immobilien vs. Wienerberger AG | CA Immobilien 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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