Correlation Between Piraeus Bank and Eurobank Ergasias
Can any of the company-specific risk be diversified away by investing in both Piraeus 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 Piraeus 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 Piraeus Bank SA and Eurobank Ergasias SA, you can compare the effects of market volatilities on Piraeus 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 Piraeus Bank with a short position of Eurobank Ergasias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piraeus Bank and Eurobank Ergasias.
Diversification Opportunities for Piraeus Bank and Eurobank Ergasias
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Piraeus and Eurobank is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Bank SA and Eurobank Ergasias SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and Piraeus 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 Piraeus Bank SA 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 Piraeus Bank i.e., Piraeus Bank and Eurobank Ergasias go up and down completely randomly.
Pair Corralation between Piraeus Bank and Eurobank Ergasias
Assuming the 90 days horizon Piraeus Bank is expected to generate 1.88 times less return on investment than Eurobank Ergasias. In addition to that, Piraeus Bank is 1.22 times more volatile than Eurobank Ergasias SA. It trades about 0.04 of its total potential returns per unit of risk. Eurobank Ergasias SA is currently generating about 0.09 per unit of volatility. If you would invest 100.00 in Eurobank Ergasias SA on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Eurobank Ergasias SA or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Piraeus Bank SA vs. Eurobank Ergasias SA
Performance |
| Timeline |
| Piraeus Bank SA |
| Eurobank Ergasias |
Piraeus Bank and Eurobank Ergasias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piraeus Bank and Eurobank Ergasias
The main advantage of trading using opposite Piraeus Bank and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piraeus 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.| Piraeus Bank vs. Bankinter SA ADR | Piraeus Bank vs. JAPAN POST BANK | Piraeus Bank vs. JAPAN POST BANK | Piraeus Bank vs. Eurobank Ergasias Services |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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