Correlation Between Erste Group and KTM Industries
Can any of the company-specific risk be diversified away by investing in both Erste Group and KTM Industries 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 KTM Industries 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 KTM Industries AG, you can compare the effects of market volatilities on Erste Group and KTM Industries 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 KTM Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and KTM Industries.
Diversification Opportunities for Erste Group and KTM Industries
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Erste and KTM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and KTM Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTM Industries AG 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 KTM Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTM Industries AG has no effect on the direction of Erste Group i.e., Erste Group and KTM Industries go up and down completely randomly.
Pair Corralation between Erste Group and KTM Industries
If you would invest 5,912 in Erste Group Bank on October 24, 2024 and sell it today you would earn a total of 250.00 from holding Erste Group Bank or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Erste Group Bank vs. KTM Industries AG
Performance |
| Timeline |
| Erste Group Bank |
| KTM Industries AG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Erste Group and KTM Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and KTM Industries
The main advantage of trading using opposite Erste Group and KTM Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, KTM Industries 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 KTM Industries will offset losses from the drop in KTM Industries' long position.| Erste Group vs. Raiffeisen Bank International | Erste Group vs. OMV Aktiengesellschaft | Erste Group vs. Voestalpine AG | Erste Group vs. Vienna Insurance Group |
| KTM Industries vs. UNIQA Insurance Group | KTM Industries vs. Erste Group Bank | KTM Industries vs. Wiener Privatbank SE | KTM Industries vs. Addiko Bank AG |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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