Correlation Between BOC Hong and Piraeus Bank
Can any of the company-specific risk be diversified away by investing in both BOC Hong and Piraeus 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 BOC Hong and Piraeus Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOC Hong Kong and Piraeus Bank SA, you can compare the effects of market volatilities on BOC Hong and Piraeus 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 BOC Hong with a short position of Piraeus Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOC Hong and Piraeus Bank.
Diversification Opportunities for BOC Hong and Piraeus Bank
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BOC and Piraeus is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding BOC Hong Kong and Piraeus Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Bank SA and BOC Hong 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 BOC Hong Kong are associated (or correlated) with Piraeus Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Bank SA has no effect on the direction of BOC Hong i.e., BOC Hong and Piraeus Bank go up and down completely randomly.
Pair Corralation between BOC Hong and Piraeus Bank
Assuming the 90 days horizon BOC Hong Kong is expected to under-perform the Piraeus Bank. But the pink sheet apears to be less risky and, when comparing its historical volatility, BOC Hong Kong is 1.39 times less risky than Piraeus Bank. The pink sheet trades about -0.16 of its potential returns per unit of risk. The Piraeus Bank SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 372.00 in Piraeus Bank SA on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Piraeus Bank SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOC Hong Kong vs. Piraeus Bank SA
Performance |
| Timeline |
| BOC Hong Kong |
| Piraeus Bank SA |
BOC Hong and Piraeus Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOC Hong and Piraeus Bank
The main advantage of trading using opposite BOC Hong and Piraeus Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOC Hong position performs unexpectedly, Piraeus 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 Piraeus Bank will offset losses from the drop in Piraeus Bank's long position.The idea behind BOC Hong Kong and Piraeus Bank SA 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.| Piraeus Bank vs. Bankinter SA ADR | Piraeus Bank vs. JAPAN POST BANK | Piraeus Bank vs. JAPAN POST BANK | Piraeus Bank vs. Eurobank Ergasias Services |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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