Correlation Between BANKINTER ADR and Erste Group

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

By analyzing existing cross correlation between BANKINTER ADR 2007 and Erste Group Bank, you can compare the effects of market volatilities on BANKINTER ADR 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 BANKINTER ADR with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANKINTER ADR and Erste Group.

Diversification Opportunities for BANKINTER ADR and Erste Group

0.85

Correlation Coefficient

BANKINTER ADR  Erste Group

Very poor diversification

The 3 months correlation between BANKINTER and Erste is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding BANKINTER ADR 2007 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 BANKINTER ADR 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 BANKINTER ADR 2007 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 BANKINTER ADR i.e., BANKINTER ADR and Erste Group go up and down completely randomly.

Pair Corralation between BANKINTER ADR and Erste Group

Assuming the 90 days horizon BANKINTER ADR is expected to generate 1.55 times less return on investment than Erste Group. But when comparing it to its historical volatility, BANKINTER ADR 2007 is 1.29 times less risky than Erste Group. It trades about 0.18 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  6,007  in Erste Group Bank on April 23, 2025 and sell it today you would earn a total of  1,623  from holding Erste Group Bank or generate 27.02% return on investment over 90 days.

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

BANKINTER ADR 2007  vs.  Erste Group Bank

BANKINTER ADR 2007

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BANKINTER ADR 2007 are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, BANKINTER ADR reported solid returns over the last few months and may actually be approaching a breakup point.

Erste Group Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Erste Group Bank are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Erste Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BANKINTER ADR and Erste Group

The main advantage of trading using opposite BANKINTER ADR and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANKINTER ADR 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 BANKINTER ADR 2007 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.