Correlation Between Erste Group and Fastenal

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

Diversification Opportunities for Erste Group and Fastenal

0.07

Correlation Coefficient

Erste Group  Fastenal

Significant diversification

The 3 months correlation between Erste and Fastenal is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal 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 Fastenal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastenal has no effect on the direction of Erste Group i.e., Erste Group and Fastenal go up and down completely randomly.

Pair Corralation between Erste Group and Fastenal

Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.85 times more return on investment than Fastenal. However, Erste Group Bank is 1.17 times less risky than Fastenal. It trades about 0.07 of its potential returns per unit of risk. Fastenal Company is currently generating about -0.08 per unit of risk. If you would invest  7,815  in Erste Group Bank on July 28, 2025 and sell it today you would earn a total of  445.00  from holding Erste Group Bank or generate 5.69% return on investment over 90 days.

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

Erste Group Bank  vs.  Fastenal Company

Erste Group Bank

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Erste Group Bank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Erste Group is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Fastenal

Risk-Adjusted Performance

Weakest

Over the last 90 days Fastenal Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Erste Group and Fastenal

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

The idea behind Erste Group Bank and Fastenal Company 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.