Correlation Between Erste Group and EMan As

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

Diversification Opportunities for Erste Group and EMan As

-0.74

Correlation Coefficient

Erste Group  EMan As

Pay attention - limited upside

The 3 months correlation between Erste and EMan is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and eMan as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eMan as 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 EMan As. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eMan as has no effect on the direction of Erste Group i.e., Erste Group and EMan As go up and down completely randomly.

Pair Corralation between Erste Group and EMan As

Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.32 times more return on investment than EMan As. However, Erste Group Bank is 3.11 times less risky than EMan As. It trades about 0.13 of its potential returns per unit of risk. eMan as is currently generating about -0.12 per unit of risk. If you would invest  120,900  in Erste Group Bank on September 4, 2024 and sell it today you would earn a total of  10,600  from holding Erste Group Bank or generate 8.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Erste Group Bank  vs.  eMan as

Erste Group Bank

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Erste Group Bank are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Erste Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

eMan as

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days eMan as has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Erste Group and EMan As

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

The idea behind Erste Group Bank and eMan as 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.