Correlation Between Erste Group and RATH Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Erste Group and RATH 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 RATH 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 RATH Aktiengesellschaft, you can compare the effects of market volatilities on Erste Group and RATH 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 RATH Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and RATH Aktiengesellscha.
Diversification Opportunities for Erste Group and RATH Aktiengesellscha
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Erste and RATH is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and RATH Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RATH 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 RATH Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RATH Aktiengesellschaft has no effect on the direction of Erste Group i.e., Erste Group and RATH Aktiengesellscha go up and down completely randomly.
Pair Corralation between Erste Group and RATH Aktiengesellscha
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 4.91 times more return on investment than RATH Aktiengesellscha. However, Erste Group is 4.91 times more volatile than RATH Aktiengesellschaft. It trades about 0.15 of its potential returns per unit of risk. RATH Aktiengesellschaft is currently generating about 0.21 per unit of risk. If you would invest 5,968 in Erste Group Bank on December 6, 2024 and sell it today you would earn a total of 626.00 from holding Erste Group Bank or generate 10.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Erste Group Bank vs. RATH Aktiengesellschaft
Performance |
| Timeline |
| Erste Group Bank |
| RATH Aktiengesellschaft |
Erste Group and RATH Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and RATH Aktiengesellscha
The main advantage of trading using opposite Erste Group and RATH Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, RATH 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 RATH Aktiengesellscha will offset losses from the drop in RATH 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 |
| RATH Aktiengesellscha vs. AMAG Austria Metall | RATH Aktiengesellscha vs. Raiffeisen Bank International | RATH Aktiengesellscha vs. CNH Industrial NV | RATH Aktiengesellscha vs. Oberbank 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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