Correlation Between Eurobank Ergasias and Broadcom
Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias and Broadcom 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 Eurobank Ergasias and Broadcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurobank Ergasias Services and Broadcom, you can compare the effects of market volatilities on Eurobank Ergasias and Broadcom 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 Eurobank Ergasias with a short position of Broadcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and Broadcom.
Diversification Opportunities for Eurobank Ergasias and Broadcom
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eurobank and Broadcom is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services and Broadcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadcom and Eurobank Ergasias 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 Eurobank Ergasias Services are associated (or correlated) with Broadcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadcom has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and Broadcom go up and down completely randomly.
Pair Corralation between Eurobank Ergasias and Broadcom
Assuming the 90 days horizon Eurobank Ergasias Services is expected to generate 1.3 times more return on investment than Broadcom. However, Eurobank Ergasias is 1.3 times more volatile than Broadcom. It trades about 0.32 of its potential returns per unit of risk. Broadcom is currently generating about 0.07 per unit of risk. If you would invest 209.00 in Eurobank Ergasias Services on October 24, 2024 and sell it today you would earn a total of 30.00 from holding Eurobank Ergasias Services or generate 14.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eurobank Ergasias Services vs. Broadcom
Performance |
| Timeline |
| Eurobank Ergasias |
| Broadcom |
Eurobank Ergasias and Broadcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurobank Ergasias and Broadcom
The main advantage of trading using opposite Eurobank Ergasias and Broadcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurobank Ergasias position performs unexpectedly, Broadcom 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 Broadcom will offset losses from the drop in Broadcom's long position.| Eurobank Ergasias vs. Broadcom | Eurobank Ergasias vs. KLA Tencor | Eurobank Ergasias vs. JD Sports Fashion | Eurobank Ergasias vs. Hollywood Intermediate |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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