Correlation Between Triad Group and Erste Group
Can any of the company-specific risk be diversified away by investing in both Triad Group 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 Triad Group and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triad Group PLC and Erste Group Bank, you can compare the effects of market volatilities on Triad Group 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 Triad Group with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triad Group and Erste Group.
Diversification Opportunities for Triad Group and Erste Group
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Triad and Erste is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC 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 Triad Group 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 Triad Group PLC 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 Triad Group i.e., Triad Group and Erste Group go up and down completely randomly.
Pair Corralation between Triad Group and Erste Group
Assuming the 90 days trading horizon Triad Group PLC is expected to under-perform the Erste Group. In addition to that, Triad Group is 1.25 times more volatile than Erste Group Bank. It trades about -0.49 of its total potential returns per unit of risk. Erste Group Bank is currently generating about 0.56 per unit of volatility. If you would invest 5,146 in Erste Group Bank on September 26, 2024 and sell it today you would earn a total of 738.00 from holding Erste Group Bank or generate 14.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triad Group PLC vs. Erste Group Bank
Performance |
| Timeline |
| Triad Group PLC |
| Erste Group Bank |
Triad Group and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triad Group and Erste Group
The main advantage of trading using opposite Triad Group and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triad Group 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.| Triad Group vs. Chocoladefabriken Lindt Spruengli | Triad Group vs. Rockwood Realisation PLC | Triad Group vs. Toyota Motor Corp | Triad Group vs. Johnson Matthey PLC |
| Erste Group vs. Uniper SE | Erste Group vs. Mulberry Group PLC | Erste Group vs. London Security Plc | Erste Group vs. Triad Group PLC |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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