Correlation Between Erste Group and National Bank
Can any of the company-specific risk be diversified away by investing in both Erste Group and National Bank 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 National Bank 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 National Bank of, you can compare the effects of market volatilities on Erste Group and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and National Bank.
Diversification Opportunities for Erste Group and National Bank
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Erste and National is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Erste Group i.e., Erste Group and National Bank go up and down completely randomly.
Pair Corralation between Erste Group and National Bank
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 1.27 times more return on investment than National Bank. However, Erste Group is 1.27 times more volatile than National Bank of. It trades about 0.24 of its potential returns per unit of risk. National Bank of is currently generating about 0.15 per unit of risk. If you would invest 8,908 in Erste Group Bank on September 6, 2025 and sell it today you would earn a total of 735.00 from holding Erste Group Bank or generate 8.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. National Bank of
Performance |
| Timeline |
| Erste Group Bank |
| National Bank |
Erste Group and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and National Bank
The main advantage of trading using opposite Erste Group and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| Erste Group vs. Smithson Investment Trust | Erste Group vs. The Mercantile Investment | Erste Group vs. Coor Service Management | Erste Group vs. BE Semiconductor Industries |
| National Bank vs. CleanTech Lithium plc | National Bank vs. Capital Drilling | National Bank vs. United Airlines Holdings | National Bank vs. Sligro Food Group |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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