Correlation Between Turism Hotelur and Erste Group
Can any of the company-specific risk be diversified away by investing in both Turism Hotelur and Erste Group 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 Turism Hotelur and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turism Hotelur and Erste Group Bank, you can compare the effects of market volatilities on Turism Hotelur and Erste Group 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 Turism Hotelur with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turism Hotelur and Erste Group.
Diversification Opportunities for Turism Hotelur and Erste Group
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Turism and Erste is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Turism Hotelur and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank and Turism Hotelur 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 Turism Hotelur are associated (or correlated) with Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of Turism Hotelur i.e., Turism Hotelur and Erste Group go up and down completely randomly.
Pair Corralation between Turism Hotelur and Erste Group
Assuming the 90 days trading horizon Turism Hotelur is expected to generate 2.46 times more return on investment than Erste Group. However, Turism Hotelur is 2.46 times more volatile than Erste Group Bank. It trades about 0.07 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.12 per unit of risk. If you would invest 26.00 in Turism Hotelur on August 27, 2024 and sell it today you would earn a total of 20.00 from holding Turism Hotelur or generate 76.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.62% |
| Values | Daily Returns |
Turism Hotelur vs. Erste Group Bank
Performance |
| Timeline |
| Turism Hotelur |
| Erste Group Bank |
Turism Hotelur and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turism Hotelur and Erste Group
The main advantage of trading using opposite Turism Hotelur and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turism Hotelur position performs unexpectedly, Erste Group 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 Erste Group will offset losses from the drop in Erste Group's long position.| Turism Hotelur vs. AROBS TRANSILVANIA SOFTWARE | Turism Hotelur vs. Safetech Innovations SA | Turism Hotelur vs. Biofarm Bucure | Turism Hotelur vs. IHUNT TECHNOLOGY IMPORT EXPORT |
| Erste Group vs. AROBS TRANSILVANIA SOFTWARE | Erste Group vs. Biofarm Bucure | Erste Group vs. Digi Communications NV | Erste Group vs. GRUPUL INDUSTRIAL ELECTROCONTACT |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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