Correlation Between RMS Mezzanine and Erste Group
Can any of the company-specific risk be diversified away by investing in both RMS Mezzanine 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 RMS Mezzanine and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RMS Mezzanine AS and Erste Group Bank, you can compare the effects of market volatilities on RMS Mezzanine 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 RMS Mezzanine with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMS Mezzanine and Erste Group.
Diversification Opportunities for RMS Mezzanine and Erste Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RMS and Erste is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding RMS Mezzanine 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 RMS Mezzanine 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 RMS Mezzanine 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 RMS Mezzanine i.e., RMS Mezzanine and Erste Group go up and down completely randomly.
Pair Corralation between RMS Mezzanine and Erste Group
Assuming the 90 days trading horizon RMS Mezzanine AS is expected to generate 7.71 times more return on investment than Erste Group. However, RMS Mezzanine is 7.71 times more volatile than Erste Group Bank. It trades about 0.05 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.1 per unit of risk. If you would invest 198.00 in RMS Mezzanine AS on September 3, 2024 and sell it today you would lose (31.00) from holding RMS Mezzanine AS or give up 15.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RMS Mezzanine AS vs. Erste Group Bank
Performance |
| Timeline |
| RMS Mezzanine AS |
| Erste Group Bank |
RMS Mezzanine and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMS Mezzanine and Erste Group
The main advantage of trading using opposite RMS Mezzanine and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMS Mezzanine 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.| RMS Mezzanine vs. Erste Group Bank | RMS Mezzanine vs. Vienna Insurance Group | RMS Mezzanine vs. JT ARCH INVESTMENTS | RMS Mezzanine vs. Komercni Banka AS |
| Erste Group vs. Vienna Insurance Group | Erste Group vs. JT ARCH INVESTMENTS | Erste Group vs. UNIQA 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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