Correlation Between National Bank and Bank of Greece
Can any of the company-specific risk be diversified away by investing in both National Bank and Bank of Greece 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 Bank of Greece 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 Bank of Greece, you can compare the effects of market volatilities on National Bank and Bank of Greece 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 Bank of Greece. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Bank of Greece.
Diversification Opportunities for National Bank and Bank of Greece
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Bank is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Bank of Greece in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Greece 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 Bank of Greece. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Greece has no effect on the direction of National Bank i.e., National Bank and Bank of Greece go up and down completely randomly.
Pair Corralation between National Bank and Bank of Greece
Assuming the 90 days trading horizon National Bank of is expected to generate 1.12 times more return on investment than Bank of Greece. However, National Bank is 1.12 times more volatile than Bank of Greece. It trades about 0.23 of its potential returns per unit of risk. Bank of Greece is currently generating about -0.14 per unit of risk. If you would invest 800.00 in National Bank of on November 5, 2024 and sell it today you would earn a total of 38.00 from holding National Bank of or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Bank of Greece
Performance |
| Timeline |
| National Bank |
| Bank of Greece |
National Bank and Bank of Greece Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Bank of Greece
The main advantage of trading using opposite National Bank and Bank of Greece positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Bank of Greece 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 Bank of Greece will offset losses from the drop in Bank of Greece's 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 |
| Bank of Greece vs. Performance Technologies SA | Bank of Greece vs. Intertech SA Inter | Bank of Greece vs. Karelia Tobacco | Bank of Greece vs. Hellenic Telecommunications Organization |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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