Correlation Between Eastern Michigan and Piraeus Bank
Can any of the company-specific risk be diversified away by investing in both Eastern Michigan and Piraeus Bank 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 Eastern Michigan and Piraeus Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Michigan Financial and Piraeus Bank SA, you can compare the effects of market volatilities on Eastern Michigan and Piraeus Bank 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 Eastern Michigan with a short position of Piraeus Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Michigan and Piraeus Bank.
Diversification Opportunities for Eastern Michigan and Piraeus Bank
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastern and Piraeus is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Michigan Financial and Piraeus Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Bank SA and Eastern Michigan 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 Eastern Michigan Financial are associated (or correlated) with Piraeus Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Bank SA has no effect on the direction of Eastern Michigan i.e., Eastern Michigan and Piraeus Bank go up and down completely randomly.
Pair Corralation between Eastern Michigan and Piraeus Bank
Given the investment horizon of 90 days Eastern Michigan is expected to generate 1.31 times less return on investment than Piraeus Bank. In addition to that, Eastern Michigan is 1.07 times more volatile than Piraeus Bank SA. It trades about 0.05 of its total potential returns per unit of risk. Piraeus Bank SA is currently generating about 0.07 per unit of volatility. If you would invest 133.00 in Piraeus Bank SA on September 3, 2024 and sell it today you would earn a total of 239.00 from holding Piraeus Bank SA or generate 179.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 76.57% |
| Values | Daily Returns |
Eastern Michigan Financial vs. Piraeus Bank SA
Performance |
| Timeline |
| Eastern Michigan Fin |
| Piraeus Bank SA |
Eastern Michigan and Piraeus Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Michigan and Piraeus Bank
The main advantage of trading using opposite Eastern Michigan and Piraeus Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Michigan position performs unexpectedly, Piraeus Bank 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 Piraeus Bank will offset losses from the drop in Piraeus Bank's long position.| Eastern Michigan vs. Commercial National Financial | Eastern Michigan vs. Mifflinburg Bancorp | Eastern Michigan vs. Apollo Bancorp | Eastern Michigan vs. Community Bankers |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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