Correlation Between Hong Kong and Erste Group
Can any of the company-specific risk be diversified away by investing in both Hong Kong 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 Hong Kong and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong Land and Erste Group Bank, you can compare the effects of market volatilities on Hong Kong 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 Hong Kong with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Erste Group.
Diversification Opportunities for Hong Kong and Erste Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hong and Erste is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land 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 Hong Kong 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 Hong Kong Land 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 Hong Kong i.e., Hong Kong and Erste Group go up and down completely randomly.
Pair Corralation between Hong Kong and Erste Group
If you would invest 5,232 in Erste Group Bank on September 13, 2024 and sell it today you would earn a total of 348.00 from holding Erste Group Bank or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hong Kong Land vs. Erste Group Bank
Performance |
| Timeline |
| Hong Kong Land |
| Erste Group Bank |
Hong Kong and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Erste Group
The main advantage of trading using opposite Hong Kong and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong 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.| Hong Kong vs. Jacquet Metal Service | Hong Kong vs. Wyndham Hotels Resorts | Hong Kong vs. InterContinental Hotels Group | Hong Kong vs. AMG Advanced Metallurgical |
| Erste Group vs. Samsung Electronics Co | Erste Group vs. Samsung Electronics Co | Erste Group vs. Hyundai Motor | Erste Group vs. Reliance Industries Ltd |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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