Correlation Between Oil Terminal and Erste Group
Can any of the company-specific risk be diversified away by investing in both Oil Terminal 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 Oil Terminal and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Terminal C and Erste Group Bank, you can compare the effects of market volatilities on Oil Terminal 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 Oil Terminal with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Terminal and Erste Group.
Diversification Opportunities for Oil Terminal and Erste Group
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oil and Erste is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Oil Terminal C 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 Oil Terminal 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 Oil Terminal C 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 Oil Terminal i.e., Oil Terminal and Erste Group go up and down completely randomly.
Pair Corralation between Oil Terminal and Erste Group
If you would invest 29,400 in Erste Group Bank on October 25, 2024 and sell it today you would earn a total of 1,260 from holding Erste Group Bank or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Terminal C vs. Erste Group Bank
Performance |
| Timeline |
| Oil Terminal C |
| Erste Group Bank |
Oil Terminal and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Terminal and Erste Group
The main advantage of trading using opposite Oil Terminal and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Terminal 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.| Oil Terminal vs. Erste Group Bank | Oil Terminal vs. Evergent Investments SA | Oil Terminal vs. Turism Hotelur | Oil Terminal vs. AROBS TRANSILVANIA SOFTWARE |
| Erste Group vs. Turism Hotelur | Erste Group vs. Patria Bank SA | Erste Group vs. IM Vinaria Purcari | Erste Group vs. AROBS TRANSILVANIA SOFTWARE |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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