Correlation Between Erste Group and Bank Fr

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

Diversification Opportunities for Erste Group and Bank Fr

0.0

Correlation Coefficient

Erste Group  Bank Fr

Pay attention - limited upside

The 3 months correlation between Erste and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Bank Fr Tirol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Fr Tirol 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 Bank Fr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Fr Tirol has no effect on the direction of Erste Group i.e., Erste Group and Bank Fr go up and down completely randomly.

Pair Corralation between Erste Group and Bank Fr

If you would invest  5,882  in Erste Group Bank on December 27, 2024 and sell it today you would earn a total of  878.00  from holding Erste Group Bank or generate 14.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Erste Group Bank  vs.  Bank Fr Tirol

Erste Group Bank

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Erste Group Bank are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Erste Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Bank Fr Tirol

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Fr Tirol has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bank Fr is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Erste Group and Bank Fr

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

The idea behind Erste Group Bank and Bank Fr Tirol 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 Commodity Directory module to find actively traded commodities issued by global exchanges.