Correlation Between Erste Group and OMV Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Erste Group and OMV Aktiengesellscha 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 OMV Aktiengesellscha 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 OMV Aktiengesellschaft, you can compare the effects of market volatilities on Erste Group and OMV Aktiengesellscha 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 OMV Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and OMV Aktiengesellscha.
Diversification Opportunities for Erste Group and OMV Aktiengesellscha
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Erste and OMV is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and OMV Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMV Aktiengesellschaft 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 OMV Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMV Aktiengesellschaft has no effect on the direction of Erste Group i.e., Erste Group and OMV Aktiengesellscha go up and down completely randomly.
Pair Corralation between Erste Group and OMV Aktiengesellscha
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 1.72 times more return on investment than OMV Aktiengesellscha. However, Erste Group is 1.72 times more volatile than OMV Aktiengesellschaft. It trades about 0.16 of its potential returns per unit of risk. OMV Aktiengesellschaft is currently generating about 0.06 per unit of risk. If you would invest 4,923 in Erste Group Bank on August 27, 2024 and sell it today you would earn a total of 275.00 from holding Erste Group Bank or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. OMV Aktiengesellschaft
Performance |
| Timeline |
| Erste Group Bank |
| OMV Aktiengesellschaft |
Erste Group and OMV Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and OMV Aktiengesellscha
The main advantage of trading using opposite Erste Group and OMV Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, OMV Aktiengesellscha 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 OMV Aktiengesellscha will offset losses from the drop in OMV Aktiengesellscha'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 |
| OMV Aktiengesellscha vs. Voestalpine AG | OMV Aktiengesellscha vs. Erste Group Bank | OMV Aktiengesellscha vs. Raiffeisen Bank International | OMV Aktiengesellscha vs. VERBUND 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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