Correlation Between W R and ERSTE GP

Can any of the company-specific risk be diversified away by investing in both W R and ERSTE GP 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 W R and ERSTE GP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between W R Berkley and ERSTE GP BNK, you can compare the effects of market volatilities on W R and ERSTE GP 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 W R with a short position of ERSTE GP. Check out your portfolio center. Please also check ongoing floating volatility patterns of W R and ERSTE GP.

Diversification Opportunities for W R and ERSTE GP

-0.09

Correlation Coefficient

W R  ERSTE GP

Good diversification

The 3 months correlation between WR1 and ERSTE is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding W R Berkley and ERSTE GP BNK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ERSTE GP BNK and W R 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 W R Berkley are associated (or correlated) with ERSTE GP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ERSTE GP BNK has no effect on the direction of W R i.e., W R and ERSTE GP go up and down completely randomly.

Pair Corralation between W R and ERSTE GP

Assuming the 90 days horizon W R is expected to generate 30.25 times less return on investment than ERSTE GP. But when comparing it to its historical volatility, W R Berkley is 1.44 times less risky than ERSTE GP. It trades about 0.01 of its potential returns per unit of risk. ERSTE GP BNK is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,908  in ERSTE GP BNK on April 21, 2025 and sell it today you would earn a total of  872.00  from holding ERSTE GP BNK or generate 29.99% return on investment over 90 days.

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

W R Berkley  vs.  ERSTE GP BNK

W R Berkley

Risk-Adjusted Performance

Very Weak

Over the last 90 days W R Berkley has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, W R is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ERSTE GP BNK

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ERSTE GP BNK are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ERSTE GP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with W R and ERSTE GP

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

The idea behind W R Berkley and ERSTE GP BNK 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.