Correlation Between Eurobank Ergasias and Foodlink
Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias and Foodlink 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 Foodlink 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 Foodlink AE, you can compare the effects of market volatilities on Eurobank Ergasias and Foodlink 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 Foodlink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and Foodlink.
Diversification Opportunities for Eurobank Ergasias and Foodlink
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eurobank and Foodlink is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services and Foodlink AE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodlink AE 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 Foodlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodlink AE has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and Foodlink go up and down completely randomly.
Pair Corralation between Eurobank Ergasias and Foodlink
Assuming the 90 days trading horizon Eurobank Ergasias Services is expected to generate 0.49 times more return on investment than Foodlink. However, Eurobank Ergasias Services is 2.03 times less risky than Foodlink. It trades about 0.26 of its potential returns per unit of risk. Foodlink AE is currently generating about 0.06 per unit of risk. If you would invest 189.00 in Eurobank Ergasias Services on August 24, 2024 and sell it today you would earn a total of 15.00 from holding Eurobank Ergasias Services or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eurobank Ergasias Services vs. Foodlink AE
Performance |
| Timeline |
| Eurobank Ergasias |
| Foodlink AE |
Eurobank Ergasias and Foodlink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurobank Ergasias and Foodlink
The main advantage of trading using opposite Eurobank Ergasias and Foodlink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurobank Ergasias position performs unexpectedly, Foodlink 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 Foodlink will offset losses from the drop in Foodlink's long position.| Eurobank Ergasias vs. Bank of Greece | Eurobank Ergasias vs. Attica Bank SA | Eurobank Ergasias vs. National Bank of | Eurobank Ergasias vs. EL D Mouzakis |
| Foodlink vs. Frigoglass SAIC | Foodlink vs. Autohellas SA | Foodlink vs. Public Power | Foodlink vs. Intralot SA Integrated |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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