Correlation Between Erste Group and Altur Slatina

Can any of the company-specific risk be diversified away by investing in both Erste Group and Altur Slatina 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 Altur Slatina 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 Altur Slatina, you can compare the effects of market volatilities on Erste Group and Altur Slatina 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 Altur Slatina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Altur Slatina.

Diversification Opportunities for Erste Group and Altur Slatina

-0.69

Correlation Coefficient

Erste Group  Altur Slatina

Excellent diversification

The 3 months correlation between Erste and Altur is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Altur Slatina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altur Slatina 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 Altur Slatina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altur Slatina has no effect on the direction of Erste Group i.e., Erste Group and Altur Slatina go up and down completely randomly.

Pair Corralation between Erste Group and Altur Slatina

Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.4 times more return on investment than Altur Slatina. However, Erste Group Bank is 2.51 times less risky than Altur Slatina. It trades about 0.11 of its potential returns per unit of risk. Altur Slatina is currently generating about 0.04 per unit of risk. If you would invest  14,326  in Erste Group Bank on September 14, 2024 and sell it today you would earn a total of  14,154  from holding Erste Group Bank or generate 98.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	84.79%
Values	Daily Returns

Erste Group Bank  vs.  Altur Slatina

Erste Group Bank

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Erste Group Bank are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Erste Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Altur Slatina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altur Slatina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Erste Group and Altur Slatina

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

The idea behind Erste Group Bank and Altur Slatina 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.