Correlation Between Lendinvest PLC and Erste Group
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC 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 Lendinvest PLC and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Erste Group Bank, you can compare the effects of market volatilities on Lendinvest PLC 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 Lendinvest PLC with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Erste Group.
Diversification Opportunities for Lendinvest PLC and Erste Group
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lendinvest and Erste is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC i.e., Lendinvest PLC and Erste Group go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Erste Group
Assuming the 90 days trading horizon Lendinvest PLC is expected to generate 0.95 times more return on investment than Erste Group. However, Lendinvest PLC is 1.05 times less risky than Erste Group. It trades about 0.35 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.2 per unit of risk. If you would invest 2,350 in Lendinvest PLC on November 28, 2024 and sell it today you would earn a total of 400.00 from holding Lendinvest PLC or generate 17.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendinvest PLC vs. Erste Group Bank
Performance |
| Timeline |
| Lendinvest PLC |
| Erste Group Bank |
Lendinvest PLC and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Erste Group
The main advantage of trading using opposite Lendinvest PLC and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC 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.| Lendinvest PLC vs. Naturhouse Health SA | Lendinvest PLC vs. Spire Healthcare Group | Lendinvest PLC vs. Scandinavian Tobacco Group | Lendinvest PLC vs. Wyndham Hotels Resorts |
| Erste Group vs. Scandic Hotels Group | Erste Group vs. Fevertree Drinks Plc | Erste Group vs. PPHE Hotel Group | Erste Group vs. Compagnie Plastic Omnium |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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