Correlation Between Eurobank Ergasias and Danske Bank
Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias and Danske 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 Eurobank Ergasias and Danske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurobank Ergasias SA and Danske Bank AS, you can compare the effects of market volatilities on Eurobank Ergasias and Danske 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 Eurobank Ergasias with a short position of Danske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and Danske Bank.
Diversification Opportunities for Eurobank Ergasias and Danske Bank
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eurobank and Danske is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias SA and Danske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Bank AS 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 SA are associated (or correlated) with Danske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Bank AS has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and Danske Bank go up and down completely randomly.
Pair Corralation between Eurobank Ergasias and Danske Bank
Assuming the 90 days horizon Eurobank Ergasias is expected to generate 1.09 times less return on investment than Danske Bank. But when comparing it to its historical volatility, Eurobank Ergasias SA is 1.32 times less risky than Danske Bank. It trades about 0.05 of its potential returns per unit of risk. Danske Bank AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. 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 |
Eurobank Ergasias SA vs. Danske Bank AS
Performance |
| Timeline |
| Eurobank Ergasias |
| Danske Bank AS |
Eurobank Ergasias and Danske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurobank Ergasias and Danske Bank
The main advantage of trading using opposite Eurobank Ergasias and Danske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurobank Ergasias position performs unexpectedly, Danske 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 Danske Bank will offset losses from the drop in Danske Bank's long position.| Eurobank Ergasias vs. Standard Bank Group | Eurobank Ergasias vs. PSB Holdings | Eurobank Ergasias vs. United Overseas Bank | Eurobank Ergasias vs. Turkiye Garanti Bankasi |
| Danske Bank vs. Eurobank Ergasias SA | Danske Bank vs. National Bank of | Danske Bank vs. Piraeus Bank SA | Danske Bank vs. Lloyds Banking Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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