Correlation Between Erste Group and Toma As
Can any of the company-specific risk be diversified away by investing in both Erste Group and Toma As 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 Toma As 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 Toma as, you can compare the effects of market volatilities on Erste Group and Toma As 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 Toma As. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Toma As.
Diversification Opportunities for Erste Group and Toma As
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Erste and Toma is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Toma as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toma 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 Toma As. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toma as has no effect on the direction of Erste Group i.e., Erste Group and Toma As go up and down completely randomly.
Pair Corralation between Erste Group and Toma As
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 1.14 times more return on investment than Toma As. However, Erste Group is 1.14 times more volatile than Toma as. It trades about 0.13 of its potential returns per unit of risk. Toma as is currently generating about 0.02 per unit of risk. If you would invest 74,724 in Erste Group Bank on August 31, 2024 and sell it today you would earn a total of 55,276 from holding Erste Group Bank or generate 73.97% 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. Toma as
Performance |
| Timeline |
| Erste Group Bank |
| Toma as |
Erste Group and Toma As Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Toma As
The main advantage of trading using opposite Erste Group and Toma As positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Toma As 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 Toma As will offset losses from the drop in Toma As' long position.| Erste Group vs. Komercni Banka AS | Erste Group vs. JT ARCH INVESTMENTS | Erste Group vs. Vienna Insurance Group |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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