Correlation Between Erste Group and Exor NV
Can any of the company-specific risk be diversified away by investing in both Erste Group and Exor NV 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 Exor NV 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 Exor NV, you can compare the effects of market volatilities on Erste Group and Exor NV 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 Exor NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Exor NV.
Diversification Opportunities for Erste Group and Exor NV
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Erste and Exor is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Exor NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exor NV 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 Exor NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exor NV has no effect on the direction of Erste Group i.e., Erste Group and Exor NV go up and down completely randomly.
Pair Corralation between Erste Group and Exor NV
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 1.07 times more return on investment than Exor NV. However, Erste Group is 1.07 times more volatile than Exor NV. It trades about 0.18 of its potential returns per unit of risk. Exor NV is currently generating about -0.13 per unit of risk. If you would invest 4,884 in Erste Group Bank on August 26, 2024 and sell it today you would earn a total of 314.00 from holding Erste Group Bank or generate 6.43% 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. Exor NV
Performance |
| Timeline |
| Erste Group Bank |
| Exor NV |
Erste Group and Exor NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Exor NV
The main advantage of trading using opposite Erste Group and Exor NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Exor NV 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 Exor NV will offset losses from the drop in Exor NV'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 |
| Exor NV vs. RATH Aktiengesellschaft | Exor NV vs. Semperit Aktiengesellschaft Holding | Exor NV vs. Oesterr Post AG | Exor NV vs. Anheuser Busch InBev SANV |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |