Correlation Between Norman Broadbent and Erste Group
Can any of the company-specific risk be diversified away by investing in both Norman Broadbent 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 Norman Broadbent and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norman Broadbent Plc and Erste Group Bank, you can compare the effects of market volatilities on Norman Broadbent 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 Norman Broadbent with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norman Broadbent and Erste Group.
Diversification Opportunities for Norman Broadbent and Erste Group
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Norman and Erste is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Norman Broadbent 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 Norman Broadbent 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 Norman Broadbent 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 Norman Broadbent i.e., Norman Broadbent and Erste Group go up and down completely randomly.
Pair Corralation between Norman Broadbent and Erste Group
Assuming the 90 days trading horizon Norman Broadbent Plc is expected to under-perform the Erste Group. In addition to that, Norman Broadbent is 2.38 times more volatile than Erste Group Bank. It trades about -0.16 of its total potential returns per unit of risk. Erste Group Bank is currently generating about 0.08 per unit of volatility. If you would invest 4,568 in Erste Group Bank on September 1, 2024 and sell it today you would earn a total of 613.00 from holding Erste Group Bank or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norman Broadbent Plc vs. Erste Group Bank
Performance |
| Timeline |
| Norman Broadbent Plc |
| Erste Group Bank |
Norman Broadbent and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norman Broadbent and Erste Group
The main advantage of trading using opposite Norman Broadbent and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norman Broadbent 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.| Norman Broadbent vs. Uniper SE | Norman Broadbent vs. Mulberry Group PLC | Norman Broadbent vs. London Security Plc | Norman Broadbent vs. Triad Group PLC |
| Erste Group vs. Norman Broadbent Plc | Erste Group vs. Hochschild Mining plc | Erste Group vs. Endeavour Mining Corp | Erste Group vs. McEwen Mining |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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