Correlation Between Eurobank Ergasias and Erste Group
Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias 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 Eurobank Ergasias and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurobank Ergasias Services and Erste Group Bank, you can compare the effects of market volatilities on Eurobank Ergasias 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 Eurobank Ergasias with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and Erste Group.
Diversification Opportunities for Eurobank Ergasias and Erste Group
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eurobank and Erste is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services 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 Eurobank Ergasias 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 Eurobank Ergasias Services 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 Eurobank Ergasias i.e., Eurobank Ergasias and Erste Group go up and down completely randomly.
Pair Corralation between Eurobank Ergasias and Erste Group
Assuming the 90 days horizon Eurobank Ergasias Services is expected to generate 1.7 times more return on investment than Erste Group. However, Eurobank Ergasias is 1.7 times more volatile than Erste Group Bank. It trades about 0.32 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.16 per unit of risk. If you would invest 209.00 in Eurobank Ergasias Services on October 25, 2024 and sell it today you would earn a total of 30.00 from holding Eurobank Ergasias Services or generate 14.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Eurobank Ergasias Services vs. Erste Group Bank
Performance |
| Timeline |
| Eurobank Ergasias |
| Erste Group Bank |
Eurobank Ergasias and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurobank Ergasias and Erste Group
The main advantage of trading using opposite Eurobank Ergasias and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurobank Ergasias 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.| Eurobank Ergasias vs. Omni Health | Eurobank Ergasias vs. BioNTech SE | Eurobank Ergasias vs. Sellas Life Sciences | Eurobank Ergasias vs. Bank of New |
| Erste Group vs. DBS Group Holdings | Erste Group vs. Swedbank AB | Erste Group vs. United Overseas Bank | Erste Group vs. Bank Mandiri Persero |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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