Correlation Between Erste Group and SIEM OFFSHORE

Can any of the company-specific risk be diversified away by investing in both Erste Group and SIEM OFFSHORE 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 Erste Group and SIEM OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Erste Group Bank and SIEM OFFSHORE NEW, you can compare the effects of market volatilities on Erste Group and SIEM OFFSHORE 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 Erste Group with a short position of SIEM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and SIEM OFFSHORE.

Diversification Opportunities for Erste Group and SIEM OFFSHORE

-0.58

Correlation Coefficient

Erste Group  SIEM OFFSHORE

Excellent diversification

The 3 months correlation between Erste and SIEM is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and SIEM OFFSHORE NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEM OFFSHORE NEW and Erste 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 Erste Group Bank are associated (or correlated) with SIEM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEM OFFSHORE NEW has no effect on the direction of Erste Group i.e., Erste Group and SIEM OFFSHORE go up and down completely randomly.

Pair Corralation between Erste Group and SIEM OFFSHORE

Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.5 times more return on investment than SIEM OFFSHORE. However, Erste Group Bank is 2.01 times less risky than SIEM OFFSHORE. It trades about 0.31 of its potential returns per unit of risk. SIEM OFFSHORE NEW is currently generating about -0.08 per unit of risk. If you would invest  5,492  in Erste Group Bank on October 11, 2024 and sell it today you would earn a total of  364.00  from holding Erste Group Bank or generate 6.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Erste Group Bank  vs.  SIEM OFFSHORE NEW

Erste Group Bank

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Erste Group Bank are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Erste Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

SIEM OFFSHORE NEW

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIEM OFFSHORE NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Erste Group and SIEM OFFSHORE

The main advantage of trading using opposite Erste Group and SIEM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, SIEM OFFSHORE 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 SIEM OFFSHORE will offset losses from the drop in SIEM OFFSHORE's long position.

The idea behind Erste Group Bank and SIEM OFFSHORE NEW pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.