Correlation Between Piraeus Bank and Summit Bancshares
Can any of the company-specific risk be diversified away by investing in both Piraeus Bank and Summit Bancshares 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 Summit Bancshares 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 Summit Bancshares, you can compare the effects of market volatilities on Piraeus Bank and Summit Bancshares 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 Summit Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piraeus Bank and Summit Bancshares.
Diversification Opportunities for Piraeus Bank and Summit Bancshares
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Piraeus and Summit is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Bank SA and Summit Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Bancshares 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 Summit Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Bancshares has no effect on the direction of Piraeus Bank i.e., Piraeus Bank and Summit Bancshares go up and down completely randomly.
Pair Corralation between Piraeus Bank and Summit Bancshares
Assuming the 90 days horizon Piraeus Bank is expected to generate 1.59 times less return on investment than Summit Bancshares. In addition to that, Piraeus Bank is 2.09 times more volatile than Summit Bancshares. It trades about 0.02 of its total potential returns per unit of risk. Summit Bancshares is currently generating about 0.07 per unit of volatility. If you would invest 4,313 in Summit Bancshares on September 1, 2024 and sell it today you would earn a total of 74.00 from holding Summit Bancshares or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Piraeus Bank SA vs. Summit Bancshares
Performance |
| Timeline |
| Piraeus Bank SA |
| Summit Bancshares |
Piraeus Bank and Summit Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piraeus Bank and Summit Bancshares
The main advantage of trading using opposite Piraeus Bank and Summit Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piraeus Bank position performs unexpectedly, Summit Bancshares 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 Summit Bancshares will offset losses from the drop in Summit Bancshares' long position.| Piraeus Bank vs. Turkiye Garanti Bankasi | Piraeus Bank vs. Delhi Bank Corp | Piraeus Bank vs. Uwharrie Capital Corp | Piraeus Bank vs. Bank Central Asia |
| Summit Bancshares vs. Piraeus Bank SA | Summit Bancshares vs. Turkiye Garanti Bankasi | Summit Bancshares vs. Delhi Bank Corp | Summit Bancshares vs. Uwharrie Capital Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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