Correlation Between Piraeus Bank and Bank Central
Can any of the company-specific risk be diversified away by investing in both Piraeus Bank and Bank Central 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 Bank Central 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 Bank Central Asia, you can compare the effects of market volatilities on Piraeus Bank and Bank Central 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 Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piraeus Bank and Bank Central.
Diversification Opportunities for Piraeus Bank and Bank Central
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Piraeus and Bank is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Bank SA and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia 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 Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of Piraeus Bank i.e., Piraeus Bank and Bank Central go up and down completely randomly.
Pair Corralation between Piraeus Bank and Bank Central
Assuming the 90 days horizon Piraeus Bank SA is expected to under-perform the Bank Central. In addition to that, Piraeus Bank is 1.69 times more volatile than Bank Central Asia. It trades about -0.01 of its total potential returns per unit of risk. Bank Central Asia is currently generating about 0.02 per unit of volatility. If you would invest 1,529 in Bank Central Asia on September 3, 2024 and sell it today you would earn a total of 52.00 from holding Bank Central Asia or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Piraeus Bank SA vs. Bank Central Asia
Performance |
| Timeline |
| Piraeus Bank SA |
| Bank Central Asia |
Piraeus Bank and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piraeus Bank and Bank Central
The main advantage of trading using opposite Piraeus Bank and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piraeus Bank position performs unexpectedly, Bank Central 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 Bank Central will offset losses from the drop in Bank Central'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 |
| Bank Central vs. Nedbank Group | Bank Central vs. Standard Bank Group | Bank Central vs. Kasikornbank Public Co | Bank Central vs. KBC Groep NV |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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