Correlation Between IHUNT TECHNOLOGY and Erste Group

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

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

Diversification Opportunities for IHUNT TECHNOLOGY and Erste Group

0.17

Correlation Coefficient

IHUNT TECHNOLOGY  Erste Group

Average diversification

The 3 months correlation between IHUNT and Erste is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding IHUNT TECHNOLOGY IMPORT EXPORT 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 IHUNT TECHNOLOGY 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 IHUNT TECHNOLOGY IMPORT EXPORT 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 IHUNT TECHNOLOGY i.e., IHUNT TECHNOLOGY and Erste Group go up and down completely randomly.

Pair Corralation between IHUNT TECHNOLOGY and Erste Group

Assuming the 90 days trading horizon IHUNT TECHNOLOGY IMPORT EXPORT is expected to under-perform the Erste Group. In addition to that, IHUNT TECHNOLOGY is 2.34 times more volatile than Erste Group Bank. It trades about -0.02 of its total potential returns per unit of risk. Erste Group Bank is currently generating about 0.37 per unit of volatility. If you would invest  25,510  in Erste Group Bank on November 28, 2024 and sell it today you would earn a total of  8,490  from holding Erste Group Bank or generate 33.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

IHUNT TECHNOLOGY IMPORT EXPORT  vs.  Erste Group Bank

IHUNT TECHNOLOGY IMPORT

Risk-Adjusted Performance

Very Weak

Over the last 90 days IHUNT TECHNOLOGY IMPORT EXPORT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, IHUNT TECHNOLOGY is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Erste Group Bank

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Erste Group Bank are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Erste Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IHUNT TECHNOLOGY and Erste Group

The main advantage of trading using opposite IHUNT TECHNOLOGY and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHUNT TECHNOLOGY 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.

The idea behind IHUNT TECHNOLOGY IMPORT EXPORT and Erste Group Bank 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..