Correlation Between Piraeus Bank and First Capital
Can any of the company-specific risk be diversified away by investing in both Piraeus Bank and First Capital 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 First Capital 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 First Capital, you can compare the effects of market volatilities on Piraeus Bank and First Capital 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 First Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piraeus Bank and First Capital.
Diversification Opportunities for Piraeus Bank and First Capital
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Piraeus and First is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Bank SA and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital 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 First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital has no effect on the direction of Piraeus Bank i.e., Piraeus Bank and First Capital go up and down completely randomly.
Pair Corralation between Piraeus Bank and First Capital
Assuming the 90 days horizon Piraeus Bank SA is expected to generate 1.05 times more return on investment than First Capital. However, Piraeus Bank is 1.05 times more volatile than First Capital. It trades about 0.38 of its potential returns per unit of risk. First Capital is currently generating about -0.03 per unit of risk. If you would invest 410.00 in Piraeus Bank SA on October 29, 2024 and sell it today you would earn a total of 67.00 from holding Piraeus Bank SA or generate 16.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Piraeus Bank SA vs. First Capital
Performance |
| Timeline |
| Piraeus Bank SA |
| First Capital |
Piraeus Bank and First Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piraeus Bank and First Capital
The main advantage of trading using opposite Piraeus Bank and First Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piraeus Bank position performs unexpectedly, First Capital 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 First Capital will offset losses from the drop in First Capital's 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 |
| First Capital vs. Home Federal Bancorp | First Capital vs. First Financial Northwest | First Capital vs. First Northwest Bancorp | First Capital vs. Community West Bancshares |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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