Correlation Between Danske Bank and Eurobank Ergasias
Can any of the company-specific risk be diversified away by investing in both Danske 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 Danske 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 Danske Bank AS and Eurobank Ergasias SA, you can compare the effects of market volatilities on Danske 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 Danske Bank with a short position of Eurobank Ergasias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Bank and Eurobank Ergasias.
Diversification Opportunities for Danske Bank and Eurobank Ergasias
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Danske and Eurobank is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Danske Bank AS and Eurobank Ergasias SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and Danske 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 Danske Bank AS 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 Danske Bank i.e., Danske Bank and Eurobank Ergasias go up and down completely randomly.
Pair Corralation between Danske Bank and Eurobank Ergasias
Assuming the 90 days horizon Danske Bank AS is expected to generate 1.32 times more return on investment than Eurobank Ergasias. However, Danske Bank is 1.32 times more volatile than Eurobank Ergasias SA. It trades about 0.04 of its potential returns per unit of risk. Eurobank Ergasias SA is currently generating about 0.05 per unit of risk. If you would invest 2,300 in Danske Bank AS on August 26, 2024 and sell it today you would earn a total of 666.00 from holding Danske Bank AS or generate 28.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danske Bank AS vs. Eurobank Ergasias SA
Performance |
| Timeline |
| Danske Bank AS |
| Eurobank Ergasias |
Danske Bank and Eurobank Ergasias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Bank and Eurobank Ergasias
The main advantage of trading using opposite Danske Bank and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske 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.| Danske Bank vs. Eurobank Ergasias SA | Danske Bank vs. National Bank of | Danske Bank vs. Piraeus Bank SA | Danske Bank vs. Lloyds Banking Group |
| Eurobank Ergasias vs. Standard Bank Group | Eurobank Ergasias vs. PSB Holdings | Eurobank Ergasias vs. United Overseas Bank | Eurobank Ergasias vs. Turkiye Garanti Bankasi |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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