Correlation Between DBS Group and Erste Group
Can any of the company-specific risk be diversified away by investing in both DBS 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 DBS 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 DBS Group Holdings and Erste Group Bank, you can compare the effects of market volatilities on DBS 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 DBS Group with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBS Group and Erste Group.
Diversification Opportunities for DBS Group and Erste Group
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DBS and Erste is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding DBS Group Holdings 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 DBS 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 DBS Group Holdings 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 DBS Group i.e., DBS Group and Erste Group go up and down completely randomly.
Pair Corralation between DBS Group and Erste Group
Assuming the 90 days horizon DBS Group is expected to generate 5.12 times less return on investment than Erste Group. But when comparing it to its historical volatility, DBS Group Holdings is 1.08 times less risky than Erste Group. It trades about 0.11 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 2,693 in Erste Group Bank on September 25, 2024 and sell it today you would earn a total of 384.00 from holding Erste Group Bank or generate 14.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
DBS Group Holdings vs. Erste Group Bank
Performance |
Timeline |
DBS Group Holdings |
Erste Group Bank |
DBS Group and Erste Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DBS Group and Erste Group
The main advantage of trading using opposite DBS Group and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBS 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.DBS Group vs. Citizens Financial Corp | DBS Group vs. Farmers Bancorp | DBS Group vs. Alpine Banks of | DBS Group vs. Taylor Calvin B |
Erste Group vs. Banco Bradesco SA | Erste Group vs. Itau Unibanco Banco | Erste Group vs. Lloyds Banking Group | Erste Group vs. Deutsche Bank AG |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |