Correlation Between SURETRACK MON and Erste Group
Can any of the company-specific risk be diversified away by investing in both SURETRACK MON 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 SURETRACK MON and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SURETRACK MON and Erste Group Bank, you can compare the effects of market volatilities on SURETRACK MON 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 SURETRACK MON with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SURETRACK MON and Erste Group.
Diversification Opportunities for SURETRACK MON and Erste Group
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SURETRACK and Erste is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding SURETRACK MON 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 SURETRACK MON 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 SURETRACK MON 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 SURETRACK MON i.e., SURETRACK MON and Erste Group go up and down completely randomly.
Pair Corralation between SURETRACK MON and Erste Group
Assuming the 90 days trading horizon SURETRACK MON is expected to under-perform the Erste Group. In addition to that, SURETRACK MON is 1.29 times more volatile than Erste Group Bank. It trades about -0.33 of its total potential returns per unit of risk. Erste Group Bank is currently generating about 0.2 per unit of volatility. If you would invest 6,170 in Erste Group Bank on November 28, 2024 and sell it today you would earn a total of 615.00 from holding Erste Group Bank or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SURETRACK MON vs. Erste Group Bank
Performance |
| Timeline |
| SURETRACK MON |
| Erste Group Bank |
SURETRACK MON and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SURETRACK MON and Erste Group
The main advantage of trading using opposite SURETRACK MON and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SURETRACK MON 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.| SURETRACK MON vs. Ryanair Holdings plc | SURETRACK MON vs. Auction Technology Group | SURETRACK MON vs. Porvair plc | SURETRACK MON vs. Take Two Interactive Software |
| Erste Group vs. Scandic Hotels Group | Erste Group vs. Fevertree Drinks Plc | Erste Group vs. PPHE Hotel Group | Erste Group vs. Compagnie Plastic Omnium |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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