Correlation Between Sch Environnement and Erste Group
Can any of the company-specific risk be diversified away by investing in both Sch Environnement 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 Sch Environnement and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sch Environnement SA and Erste Group Bank, you can compare the effects of market volatilities on Sch Environnement 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 Sch Environnement with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sch Environnement and Erste Group.
Diversification Opportunities for Sch Environnement and Erste Group
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sch and Erste is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sch Environnement SA 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 Sch Environnement 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 Sch Environnement SA 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 Sch Environnement i.e., Sch Environnement and Erste Group go up and down completely randomly.
Pair Corralation between Sch Environnement and Erste Group
Assuming the 90 days horizon Sch Environnement SA is expected to generate 2.17 times more return on investment than Erste Group. However, Sch Environnement is 2.17 times more volatile than Erste Group Bank. It trades about 0.11 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.07 per unit of risk. If you would invest 7,820 in Sch Environnement SA on November 7, 2024 and sell it today you would earn a total of 460.00 from holding Sch Environnement SA or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sch Environnement SA vs. Erste Group Bank
Performance |
| Timeline |
| Sch Environnement |
| Erste Group Bank |
Sch Environnement and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sch Environnement and Erste Group
The main advantage of trading using opposite Sch Environnement and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sch Environnement 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.| Sch Environnement vs. Waste Management | Sch Environnement vs. Republic Services | Sch Environnement vs. Waste Connections | Sch Environnement vs. Veolia Environnement SA |
| Erste Group vs. Siamgas And Petrochemicals | Erste Group vs. Universal Health Realty | Erste Group vs. ALERION CLEANPOWER | Erste Group vs. ULTRA CLEAN HLDGS |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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