Correlation Between National Bank and Eurobank Ergasias
Can any of the company-specific risk be diversified away by investing in both National 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 National 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 National Bank of and Eurobank Ergasias Services, you can compare the effects of market volatilities on National 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 National Bank with a short position of Eurobank Ergasias. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Eurobank Ergasias.
Diversification Opportunities for National Bank and Eurobank Ergasias
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between National and Eurobank is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Eurobank Ergasias Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and National 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 National Bank of 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 National Bank i.e., National Bank and Eurobank Ergasias go up and down completely randomly.
Pair Corralation between National Bank and Eurobank Ergasias
Assuming the 90 days trading horizon National Bank of is expected to generate 1.08 times more return on investment than Eurobank Ergasias. However, National Bank is 1.08 times more volatile than Eurobank Ergasias Services. It trades about 0.08 of its potential returns per unit of risk. Eurobank Ergasias Services is currently generating about 0.08 per unit of risk. If you would invest 430.00 in National Bank of on October 24, 2024 and sell it today you would earn a total of 417.00 from holding National Bank of or generate 96.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Eurobank Ergasias Services
Performance |
| Timeline |
| National Bank |
| Eurobank Ergasias |
National Bank and Eurobank Ergasias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Eurobank Ergasias
The main advantage of trading using opposite National Bank and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National 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.| National Bank vs. Alpha Services and | National Bank vs. Eurobank Ergasias Services | National Bank vs. Piraeus Financial Holdings | National Bank vs. Greek Organization of |
| Eurobank Ergasias vs. Alpha Services and | Eurobank Ergasias vs. Piraeus Financial Holdings | Eurobank Ergasias vs. National Bank of | Eurobank Ergasias vs. Greek Organization of |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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