Correlation Between Erste Group and Komercni Banka
Can any of the company-specific risk be diversified away by investing in both Erste Group and Komercni Banka 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 Komercni Banka 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 Komercni Banka AS, you can compare the effects of market volatilities on Erste Group and Komercni Banka 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 Komercni Banka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Komercni Banka.
Diversification Opportunities for Erste Group and Komercni Banka
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Erste and Komercni is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Komercni Banka AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komercni Banka AS 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 Komercni Banka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komercni Banka AS has no effect on the direction of Erste Group i.e., Erste Group and Komercni Banka go up and down completely randomly.
Pair Corralation between Erste Group and Komercni Banka
Assuming the 90 days trading horizon Erste Group is expected to generate 1.66 times less return on investment than Komercni Banka. In addition to that, Erste Group is 1.5 times more volatile than Komercni Banka AS. It trades about 0.13 of its total potential returns per unit of risk. Komercni Banka AS is currently generating about 0.32 per unit of volatility. If you would invest 85,300 in Komercni Banka AS on November 3, 2024 and sell it today you would earn a total of 3,800 from holding Komercni Banka AS or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. Komercni Banka AS
Performance |
| Timeline |
| Erste Group Bank |
| Komercni Banka AS |
Erste Group and Komercni Banka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Komercni Banka
The main advantage of trading using opposite Erste Group and Komercni Banka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Komercni Banka 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 Komercni Banka will offset losses from the drop in Komercni Banka's long position.| Erste Group vs. Raiffeisen Bank International | Erste Group vs. JT ARCH INVESTMENTS | Erste Group vs. Komercni Banka AS | Erste Group vs. Moneta Money Bank |
| Komercni Banka vs. Cez AS | Komercni Banka vs. Moneta Money Bank | Komercni Banka vs. Erste Group Bank | Komercni Banka vs. Philip Morris CR |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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