Correlation Between Fidelity Sustainable and Erste Group
Can any of the company-specific risk be diversified away by investing in both Fidelity Sustainable 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 Fidelity Sustainable and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Sustainable USD and Erste Group Bank, you can compare the effects of market volatilities on Fidelity Sustainable 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 Fidelity Sustainable with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sustainable and Erste Group.
Diversification Opportunities for Fidelity Sustainable and Erste Group
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Erste is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sustainable USD 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 Fidelity Sustainable 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 Fidelity Sustainable USD 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 Fidelity Sustainable i.e., Fidelity Sustainable and Erste Group go up and down completely randomly.
Pair Corralation between Fidelity Sustainable and Erste Group
Assuming the 90 days trading horizon Fidelity Sustainable is expected to generate 5.53 times less return on investment than Erste Group. But when comparing it to its historical volatility, Fidelity Sustainable USD is 3.03 times less risky than Erste Group. It trades about 0.07 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,175 in Erste Group Bank on September 12, 2024 and sell it today you would earn a total of 2,355 from holding Erste Group Bank or generate 74.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Sustainable USD vs. Erste Group Bank
Performance |
| Timeline |
| Fidelity Sustainable USD |
| Erste Group Bank |
Fidelity Sustainable and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Sustainable and Erste Group
The main advantage of trading using opposite Fidelity Sustainable and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Sustainable 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.| Fidelity Sustainable vs. GraniteShares 3x Short | Fidelity Sustainable vs. WisdomTree Natural Gas | Fidelity Sustainable vs. Leverage Shares 3x | Fidelity Sustainable vs. WisdomTree Natural Gas |
| Erste Group vs. Hong Kong Land | Erste Group vs. Neometals | Erste Group vs. Coor Service Management | Erste Group vs. Fidelity Sustainable USD |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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