Correlation Between Séché Environnement and Erste Group
Can any of the company-specific risk be diversified away by investing in both Séché 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 Séché 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 Séché 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 Séché Environnement with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Séché Environnement and Erste Group.
Diversification Opportunities for Séché Environnement and Erste Group
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Séché 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 Séché 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 Séché Environnement i.e., Séché Environnement and Erste Group go up and down completely randomly.
Pair Corralation between Séché Environnement and Erste Group
Assuming the 90 days horizon Sch Environnement SA is expected to under-perform the Erste Group. In addition to that, Séché Environnement is 1.49 times more volatile than Erste Group Bank. It trades about -0.13 of its total potential returns per unit of risk. Erste Group Bank is currently generating about 0.34 per unit of volatility. If you would invest 5,268 in Erste Group Bank on October 16, 2024 and sell it today you would earn a total of 804.00 from holding Erste Group Bank or generate 15.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sch Environnement SA vs. Erste Group Bank
Performance |
| Timeline |
| Séché Environnement |
| Erste Group Bank |
Séché Environnement and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Séché Environnement and Erste Group
The main advantage of trading using opposite Séché Environnement and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Séché 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.| Séché Environnement vs. 24SEVENOFFICE GROUP AB | Séché Environnement vs. USWE SPORTS AB | Séché Environnement vs. PLAYWAY SA ZY 10 | Séché Environnement vs. PLAYTIKA HOLDING DL 01 |
| Erste Group vs. Sch Environnement SA | Erste Group vs. Lifeway Foods | Erste Group vs. EBRO FOODS | Erste Group vs. INDOFOOD AGRI RES |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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