Correlation Between OMV Aktiengesellscha and Erste Group
Can any of the company-specific risk be diversified away by investing in both OMV Aktiengesellscha 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 OMV Aktiengesellscha and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OMV Aktiengesellschaft and Erste Group Bank, you can compare the effects of market volatilities on OMV Aktiengesellscha 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 OMV Aktiengesellscha with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMV Aktiengesellscha and Erste Group.
Diversification Opportunities for OMV Aktiengesellscha and Erste Group
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between OMV and Erste is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding OMV Aktiengesellschaft 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 OMV Aktiengesellscha 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 OMV Aktiengesellschaft 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 OMV Aktiengesellscha i.e., OMV Aktiengesellscha and Erste Group go up and down completely randomly.
Pair Corralation between OMV Aktiengesellscha and Erste Group
Assuming the 90 days trading horizon OMV Aktiengesellschaft is expected to generate 0.82 times more return on investment than Erste Group. However, OMV Aktiengesellschaft is 1.21 times less risky than Erste Group. It trades about 0.18 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.08 per unit of risk. If you would invest 3,844 in OMV Aktiengesellschaft on November 3, 2024 and sell it today you would earn a total of 144.00 from holding OMV Aktiengesellschaft or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OMV Aktiengesellschaft vs. Erste Group Bank
Performance |
| Timeline |
| OMV Aktiengesellschaft |
| Erste Group Bank |
OMV Aktiengesellscha and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OMV Aktiengesellscha and Erste Group
The main advantage of trading using opposite OMV Aktiengesellscha and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMV Aktiengesellscha 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.| OMV Aktiengesellscha vs. Voestalpine AG | OMV Aktiengesellscha vs. Erste Group Bank | OMV Aktiengesellscha vs. Raiffeisen Bank International | OMV Aktiengesellscha vs. VERBUND AG |
| Erste Group vs. Raiffeisen Bank International | Erste Group vs. OMV Aktiengesellschaft | Erste Group vs. Voestalpine AG | Erste Group vs. Vienna Insurance Group |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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