Correlation Between Piraeus Bank and Permanent TSB
Can any of the company-specific risk be diversified away by investing in both Piraeus Bank and Permanent TSB 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 Permanent TSB 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 Permanent TSB Group, you can compare the effects of market volatilities on Piraeus Bank and Permanent TSB 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 Permanent TSB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piraeus Bank and Permanent TSB.
Diversification Opportunities for Piraeus Bank and Permanent TSB
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Piraeus and Permanent is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Bank SA and Permanent TSB Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permanent TSB Group 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 Permanent TSB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permanent TSB Group has no effect on the direction of Piraeus Bank i.e., Piraeus Bank and Permanent TSB go up and down completely randomly.
Pair Corralation between Piraeus Bank and Permanent TSB
Assuming the 90 days horizon Piraeus Bank SA is expected to generate 1.54 times more return on investment than Permanent TSB. However, Piraeus Bank is 1.54 times more volatile than Permanent TSB Group. It trades about 0.03 of its potential returns per unit of risk. Permanent TSB Group is currently generating about -0.22 per unit of risk. If you would invest 369.00 in Piraeus Bank SA on September 3, 2024 and sell it today you would earn a total of 3.00 from holding Piraeus Bank SA or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Piraeus Bank SA vs. Permanent TSB Group
Performance |
| Timeline |
| Piraeus Bank SA |
| Permanent TSB Group |
Piraeus Bank and Permanent TSB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piraeus Bank and Permanent TSB
The main advantage of trading using opposite Piraeus Bank and Permanent TSB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piraeus Bank position performs unexpectedly, Permanent TSB 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 Permanent TSB will offset losses from the drop in Permanent TSB'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 |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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