Correlation Between Schweizerische Nationalbank and Erste Group
Can any of the company-specific risk be diversified away by investing in both Schweizerische Nationalbank 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 Schweizerische Nationalbank and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schweizerische Nationalbank and Erste Group Bank, you can compare the effects of market volatilities on Schweizerische Nationalbank 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 Schweizerische Nationalbank with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizerische Nationalbank and Erste Group.
Diversification Opportunities for Schweizerische Nationalbank and Erste Group
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Schweizerische and Erste is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Schweizerische Nationalbank 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 Schweizerische Nationalbank 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 Schweizerische Nationalbank 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 Schweizerische Nationalbank i.e., Schweizerische Nationalbank and Erste Group go up and down completely randomly.
Pair Corralation between Schweizerische Nationalbank and Erste Group
Assuming the 90 days horizon Schweizerische Nationalbank is expected to generate 0.74 times more return on investment than Erste Group. However, Schweizerische Nationalbank is 1.36 times less risky than Erste Group. It trades about 0.34 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.19 per unit of risk. If you would invest 353,738 in Schweizerische Nationalbank on October 24, 2024 and sell it today you would earn a total of 23,790 from holding Schweizerische Nationalbank or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schweizerische Nationalbank vs. Erste Group Bank
Performance |
| Timeline |
| Schweizerische Nationalbank |
| Erste Group Bank |
Schweizerische Nationalbank and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schweizerische Nationalbank and Erste Group
The main advantage of trading using opposite Schweizerische Nationalbank and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizerische Nationalbank 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.| Schweizerische Nationalbank vs. Israel Discount Bank | Schweizerische Nationalbank vs. Baraboo Bancorporation | Schweizerische Nationalbank vs. Danske Bank AS | Schweizerische Nationalbank vs. Jyske Bank AS |
| Erste Group vs. DBS Group Holdings | Erste Group vs. Swedbank AB | Erste Group vs. United Overseas Bank | Erste Group vs. Bank Mandiri Persero |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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