Correlation Between Piraeus Financial and WesBanco
Can any of the company-specific risk be diversified away by investing in both Piraeus Financial and WesBanco 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 Piraeus Financial and WesBanco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Piraeus Financial Holdings and WesBanco, you can compare the effects of market volatilities on Piraeus Financial and WesBanco 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 Piraeus Financial with a short position of WesBanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piraeus Financial and WesBanco.
Diversification Opportunities for Piraeus Financial and WesBanco
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Piraeus and WesBanco is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Financial Holdings and WesBanco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WesBanco and Piraeus Financial 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 Piraeus Financial Holdings are associated (or correlated) with WesBanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WesBanco has no effect on the direction of Piraeus Financial i.e., Piraeus Financial and WesBanco go up and down completely randomly.
Pair Corralation between Piraeus Financial and WesBanco
Assuming the 90 days horizon Piraeus Financial Holdings is expected to generate 3.73 times more return on investment than WesBanco. However, Piraeus Financial is 3.73 times more volatile than WesBanco. It trades about 0.13 of its potential returns per unit of risk. WesBanco is currently generating about 0.02 per unit of risk. If you would invest 150.00 in Piraeus Financial Holdings on October 14, 2024 and sell it today you would earn a total of 229.00 from holding Piraeus Financial Holdings or generate 152.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 34.27% |
| Values | Daily Returns |
Piraeus Financial Holdings vs. WesBanco
Performance |
| Timeline |
| Piraeus Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| WesBanco |
Piraeus Financial and WesBanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piraeus Financial and WesBanco
The main advantage of trading using opposite Piraeus Financial and WesBanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piraeus Financial position performs unexpectedly, WesBanco 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 WesBanco will offset losses from the drop in WesBanco's long position.| Piraeus Financial vs. Alpha Bank SA | Piraeus Financial vs. Eurobank Ergasias SA | Piraeus Financial vs. Piraeus Bank SA | Piraeus Financial vs. First Citizens BancShares |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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