Correlation Between Erste Group and Oberbank
Can any of the company-specific risk be diversified away by investing in both Erste Group and Oberbank 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 Oberbank 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 Oberbank AG, you can compare the effects of market volatilities on Erste Group and Oberbank 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 Oberbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Oberbank.
Diversification Opportunities for Erste Group and Oberbank
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Erste and Oberbank is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Oberbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberbank 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 Oberbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberbank AG has no effect on the direction of Erste Group i.e., Erste Group and Oberbank go up and down completely randomly.
Pair Corralation between Erste Group and Oberbank
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 18.63 times more return on investment than Oberbank. However, Erste Group is 18.63 times more volatile than Oberbank AG. It trades about 0.1 of its potential returns per unit of risk. Oberbank AG is currently generating about 0.21 per unit of risk. If you would invest 5,808 in Erste Group Bank on November 4, 2024 and sell it today you would earn a total of 136.00 from holding Erste Group Bank or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. Oberbank AG
Performance |
| Timeline |
| Erste Group Bank |
| Oberbank AG |
Erste Group and Oberbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Oberbank
The main advantage of trading using opposite Erste Group and Oberbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Oberbank 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 Oberbank will offset losses from the drop in Oberbank'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 |
| Oberbank vs. Vienna Insurance Group | Oberbank vs. AMAG Austria Metall | Oberbank vs. Addiko Bank AG | Oberbank vs. Erste Group Bank |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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