Correlation Between Erste Group and SAB Finance
Can any of the company-specific risk be diversified away by investing in both Erste Group and SAB Finance 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 SAB Finance 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 SAB Finance as, you can compare the effects of market volatilities on Erste Group and SAB Finance 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 SAB Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and SAB Finance.
Diversification Opportunities for Erste Group and SAB Finance
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Erste and SAB is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and SAB Finance as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Finance 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 SAB Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAB Finance as has no effect on the direction of Erste Group i.e., Erste Group and SAB Finance go up and down completely randomly.
Pair Corralation between Erste Group and SAB Finance
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 2.03 times more return on investment than SAB Finance. However, Erste Group is 2.03 times more volatile than SAB Finance as. It trades about 0.19 of its potential returns per unit of risk. SAB Finance as is currently generating about -0.07 per unit of risk. If you would invest 125,600 in Erste Group Bank on August 27, 2024 and sell it today you would earn a total of 6,100 from holding Erste Group Bank or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. SAB Finance as
Performance |
| Timeline |
| Erste Group Bank |
| SAB Finance as |
Erste Group and SAB Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and SAB Finance
The main advantage of trading using opposite Erste Group and SAB Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, SAB Finance 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 SAB Finance will offset losses from the drop in SAB Finance's long position.| Erste Group vs. Moneta Money Bank | Erste Group vs. UNIQA Insurance Group | Erste Group vs. Komercni Banka AS | Erste Group vs. Vienna Insurance Group |
| SAB Finance vs. Erste Group Bank | SAB Finance vs. Moneta Money Bank | SAB Finance vs. Vienna Insurance Group | SAB Finance vs. JT ARCH INVESTMENTS |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |