Correlation Between Prabos Plus and Erste Group
Can any of the company-specific risk be diversified away by investing in both Prabos Plus 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 Prabos Plus and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prabos Plus as and Erste Group Bank, you can compare the effects of market volatilities on Prabos Plus 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 Prabos Plus with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prabos Plus and Erste Group.
Diversification Opportunities for Prabos Plus and Erste Group
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prabos and Erste is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Prabos Plus as 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 Prabos Plus 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 Prabos Plus as 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 Prabos Plus i.e., Prabos Plus and Erste Group go up and down completely randomly.
Pair Corralation between Prabos Plus and Erste Group
Assuming the 90 days trading horizon Prabos Plus is expected to generate 2.34 times less return on investment than Erste Group. In addition to that, Prabos Plus is 2.1 times more volatile than Erste Group Bank. It trades about 0.02 of its total potential returns per unit of risk. Erste Group Bank is currently generating about 0.11 per unit of volatility. If you would invest 121,650 in Erste Group Bank on August 28, 2024 and sell it today you would earn a total of 8,550 from holding Erste Group Bank or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Prabos Plus as vs. Erste Group Bank
Performance |
| Timeline |
| Prabos Plus as |
| Erste Group Bank |
Prabos Plus and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prabos Plus and Erste Group
The main advantage of trading using opposite Prabos Plus and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prabos Plus 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.| Prabos Plus vs. Erste Group Bank | Prabos Plus vs. Vienna Insurance Group | Prabos Plus vs. Komercni Banka AS | Prabos Plus vs. Raiffeisen Bank International |
| Erste Group vs. Cez AS | Erste Group vs. Kofola CeskoSlovensko as | Erste Group vs. MT 1997 AS | Erste Group vs. HARDWARIO as |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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