Correlation Between Compania Hoteliera and Erste Group
Can any of the company-specific risk be diversified away by investing in both Compania Hoteliera 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 Compania Hoteliera and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compania Hoteliera InterContinental and Erste Group Bank, you can compare the effects of market volatilities on Compania Hoteliera 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 Compania Hoteliera with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Hoteliera and Erste Group.
Diversification Opportunities for Compania Hoteliera and Erste Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compania and Erste is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Compania Hoteliera InterContin 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 Compania Hoteliera 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 Compania Hoteliera InterContinental 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 Compania Hoteliera i.e., Compania Hoteliera and Erste Group go up and down completely randomly.
Pair Corralation between Compania Hoteliera and Erste Group
If you would invest 29,030 in Erste Group Bank on November 5, 2024 and sell it today you would earn a total of 730.00 from holding Erste Group Bank or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Compania Hoteliera InterContin vs. Erste Group Bank
Performance |
| Timeline |
| Compania Hoteliera |
| Erste Group Bank |
Compania Hoteliera and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Hoteliera and Erste Group
The main advantage of trading using opposite Compania Hoteliera and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Hoteliera 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.| Compania Hoteliera vs. Erste Group Bank | Compania Hoteliera vs. AROBS TRANSILVANIA SOFTWARE | Compania Hoteliera vs. Infinity Capital Investments | Compania Hoteliera vs. Digi Communications NV |
| Erste Group vs. Digi Communications NV | Erste Group vs. Turism Hotelur | Erste Group vs. Infinity Capital Investments | 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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