Correlation Between Eurobank Ergasias and Iktinos Hellas
Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias and Iktinos Hellas 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 Iktinos Hellas 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 Iktinos Hellas SA, you can compare the effects of market volatilities on Eurobank Ergasias and Iktinos Hellas 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 Iktinos Hellas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and Iktinos Hellas.
Diversification Opportunities for Eurobank Ergasias and Iktinos Hellas
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eurobank and Iktinos is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services and Iktinos Hellas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iktinos Hellas SA 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 Iktinos Hellas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iktinos Hellas SA has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and Iktinos Hellas go up and down completely randomly.
Pair Corralation between Eurobank Ergasias and Iktinos Hellas
Assuming the 90 days trading horizon Eurobank Ergasias Services is expected to generate 0.43 times more return on investment than Iktinos Hellas. However, Eurobank Ergasias Services is 2.3 times less risky than Iktinos Hellas. It trades about 0.26 of its potential returns per unit of risk. Iktinos Hellas SA is currently generating about 0.11 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eurobank Ergasias Services vs. Iktinos Hellas SA
Performance |
| Timeline |
| Eurobank Ergasias |
| Iktinos Hellas SA |
Eurobank Ergasias and Iktinos Hellas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurobank Ergasias and Iktinos Hellas
The main advantage of trading using opposite Eurobank Ergasias and Iktinos Hellas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurobank Ergasias position performs unexpectedly, Iktinos Hellas 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 Iktinos Hellas will offset losses from the drop in Iktinos Hellas' long position.| Eurobank Ergasias vs. Alpha Services and | Eurobank Ergasias vs. Piraeus Financial Holdings | Eurobank Ergasias vs. National Bank of | Eurobank Ergasias vs. Greek Organization of |
| Iktinos Hellas vs. Hellenic Petroleum SA | Iktinos Hellas vs. Motor Oil Corinth | Iktinos Hellas vs. Hellenic Exchanges | Iktinos Hellas vs. Athens Water Supply |
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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