Correlation Between Dromeas SA and Eurobank Ergasias
Can any of the company-specific risk be diversified away by investing in both Dromeas SA 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 Dromeas SA and Eurobank Ergasias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dromeas SA and Eurobank Ergasias Services, you can compare the effects of market volatilities on Dromeas SA 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 Dromeas SA with a short position of Eurobank Ergasias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dromeas SA and Eurobank Ergasias.
Diversification Opportunities for Dromeas SA and Eurobank Ergasias
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dromeas and Eurobank is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dromeas SA and Eurobank Ergasias Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and Dromeas SA 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 Dromeas SA 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 Dromeas SA i.e., Dromeas SA and Eurobank Ergasias go up and down completely randomly.
Pair Corralation between Dromeas SA and Eurobank Ergasias
Assuming the 90 days trading horizon Dromeas SA is expected to under-perform the Eurobank Ergasias. In addition to that, Dromeas SA is 1.37 times more volatile than Eurobank Ergasias Services. It trades about -0.01 of its total potential returns per unit of risk. Eurobank Ergasias Services is currently generating about 0.02 per unit of volatility. If you would invest 196.00 in Eurobank Ergasias Services on August 30, 2024 and sell it today you would earn a total of 5.00 from holding Eurobank Ergasias Services or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Dromeas SA vs. Eurobank Ergasias Services
Performance |
| Timeline |
| Dromeas SA |
| Eurobank Ergasias |
Dromeas SA and Eurobank Ergasias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dromeas SA and Eurobank Ergasias
The main advantage of trading using opposite Dromeas SA and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dromeas SA 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.| Dromeas SA vs. Ekter SA | Dromeas SA vs. Mytilineos SA | Dromeas SA vs. Fourlis Holdings SA | Dromeas SA vs. Aegean Airlines SA |
| Eurobank Ergasias vs. National Bank of | Eurobank Ergasias vs. EL D Mouzakis | Eurobank Ergasias vs. Lampsa Hellenic Hotels | Eurobank Ergasias vs. Alpha Trust Mutual |
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 Stocks Directory module to find actively traded stocks across global markets.
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