Correlation Between Mount Gibson and Erste Group
Can any of the company-specific risk be diversified away by investing in both Mount Gibson 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 Mount Gibson and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mount Gibson Iron and Erste Group Bank, you can compare the effects of market volatilities on Mount Gibson 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 Mount Gibson with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mount Gibson and Erste Group.
Diversification Opportunities for Mount Gibson and Erste Group
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mount and Erste is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mount Gibson Iron 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 Mount Gibson 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 Mount Gibson Iron 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 Mount Gibson i.e., Mount Gibson and Erste Group go up and down completely randomly.
Pair Corralation between Mount Gibson and Erste Group
Assuming the 90 days horizon Mount Gibson Iron is expected to generate 6.95 times more return on investment than Erste Group. However, Mount Gibson is 6.95 times more volatile than Erste Group Bank. It trades about 0.04 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.18 per unit of risk. If you would invest 17.00 in Mount Gibson Iron on November 2, 2024 and sell it today you would earn a total of 1.00 from holding Mount Gibson Iron or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mount Gibson Iron vs. Erste Group Bank
Performance |
| Timeline |
| Mount Gibson Iron |
| Erste Group Bank |
Mount Gibson and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mount Gibson and Erste Group
The main advantage of trading using opposite Mount Gibson and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mount Gibson 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.| Mount Gibson vs. Planet Fitness | Mount Gibson vs. National Health Investors | Mount Gibson vs. Molina Healthcare | Mount Gibson vs. Cardinal Health |
| Erste Group vs. ANTA SPORTS PRODUCT | Erste Group vs. Apollo Investment Corp | Erste Group vs. PENN Entertainment | Erste Group vs. Prosiebensat 1 Media |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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