Correlation Between Telecom Argentina and Erste Group
Can any of the company-specific risk be diversified away by investing in both Telecom Argentina 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 Telecom Argentina and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Argentina SA and Erste Group Bank, you can compare the effects of market volatilities on Telecom Argentina 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 Telecom Argentina with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and Erste Group.
Diversification Opportunities for Telecom Argentina and Erste Group
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Telecom and Erste is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina 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 Telecom Argentina 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 Telecom Argentina 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 Telecom Argentina i.e., Telecom Argentina and Erste Group go up and down completely randomly.
Pair Corralation between Telecom Argentina and Erste Group
Assuming the 90 days horizon Telecom Argentina SA is expected to generate 2.61 times more return on investment than Erste Group. However, Telecom Argentina is 2.61 times more volatile than Erste Group Bank. It trades about 0.08 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.16 per unit of risk. If you would invest 657.00 in Telecom Argentina SA on November 8, 2024 and sell it today you would earn a total of 473.00 from holding Telecom Argentina SA or generate 71.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Telecom Argentina SA vs. Erste Group Bank
Performance |
| Timeline |
| Telecom Argentina |
| Erste Group Bank |
Telecom Argentina and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Argentina and Erste Group
The main advantage of trading using opposite Telecom Argentina and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina 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.| Telecom Argentina vs. EVS Broadcast Equipment | Telecom Argentina vs. TITANIUM TRANSPORTGROUP | Telecom Argentina vs. BROADPEAK SA EO | Telecom Argentina vs. GOLD ROAD RES |
| Erste Group vs. JD SPORTS FASH | Erste Group vs. SCIENCE IN SPORT | Erste Group vs. COVIVIO HOTELS INH | Erste Group vs. SPORTING |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |