Correlation Between PT Bank and Eurobank Ergasias
Can any of the company-specific risk be diversified away by investing in both PT Bank and Eurobank Ergasias 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 PT Bank and Eurobank Ergasias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Rakyat and Eurobank Ergasias Services, you can compare the effects of market volatilities on PT Bank and Eurobank Ergasias 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 PT Bank with a short position of Eurobank Ergasias. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Eurobank Ergasias.
Diversification Opportunities for PT Bank and Eurobank Ergasias
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BKRKF and Eurobank is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Eurobank Ergasias Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and PT Bank 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 PT Bank Rakyat are associated (or correlated) with Eurobank Ergasias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurobank Ergasias has no effect on the direction of PT Bank i.e., PT Bank and Eurobank Ergasias go up and down completely randomly.
Pair Corralation between PT Bank and Eurobank Ergasias
Assuming the 90 days horizon PT Bank is expected to generate 10.4 times less return on investment than Eurobank Ergasias. In addition to that, PT Bank is 4.94 times more volatile than Eurobank Ergasias Services. It trades about 0.0 of its total potential returns per unit of risk. Eurobank Ergasias Services is currently generating about 0.22 per unit of volatility. If you would invest 209.00 in Eurobank Ergasias Services on October 23, 2024 and sell it today you would earn a total of 30.00 from holding Eurobank Ergasias Services or generate 14.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Eurobank Ergasias Services
Performance |
| Timeline |
| PT Bank Rakyat |
| Eurobank Ergasias |
PT Bank and Eurobank Ergasias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Eurobank Ergasias
The main advantage of trading using opposite PT Bank and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Eurobank Ergasias 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 Eurobank Ergasias will offset losses from the drop in Eurobank Ergasias' long position.| PT Bank vs. Bank Mandiri Persero | PT Bank vs. Piraeus Bank SA | PT Bank vs. Eurobank Ergasias Services | PT Bank vs. Kasikornbank Public Co |
| Eurobank Ergasias vs. National Beverage Corp | Eurobank Ergasias vs. Vita Coco | Eurobank Ergasias vs. Meli Hotels International | Eurobank Ergasias vs. Oasis Hotel Resort |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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