Correlation Between Eurobank Ergasias and Bank of Greece
Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias 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 Eurobank Ergasias 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 Eurobank Ergasias Services and Bank of Greece, you can compare the effects of market volatilities on Eurobank Ergasias 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 Eurobank Ergasias with a short position of Bank of Greece. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and Bank of Greece.
Diversification Opportunities for Eurobank Ergasias and Bank of Greece
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eurobank and Bank is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services 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 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 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 Eurobank Ergasias i.e., Eurobank Ergasias and Bank of Greece go up and down completely randomly.
Pair Corralation between Eurobank Ergasias and Bank of Greece
Assuming the 90 days trading horizon Eurobank Ergasias Services is expected to generate 1.99 times more return on investment than Bank of Greece. However, Eurobank Ergasias is 1.99 times more volatile than Bank of Greece. It trades about -0.02 of its potential returns per unit of risk. Bank of Greece is currently generating about -0.09 per unit of risk. If you would invest 209.00 in Eurobank Ergasias Services on August 28, 2024 and sell it today you would lose (4.00) from holding Eurobank Ergasias Services or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eurobank Ergasias Services vs. Bank of Greece
Performance |
| Timeline |
| Eurobank Ergasias |
| Bank of Greece |
Eurobank Ergasias and Bank of Greece Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurobank Ergasias and Bank of Greece
The main advantage of trading using opposite Eurobank Ergasias and Bank of Greece positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurobank Ergasias 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.| Eurobank Ergasias vs. National Bank of | Eurobank Ergasias vs. EL D Mouzakis | Eurobank Ergasias vs. Lampsa Hellenic Hotels | Eurobank Ergasias vs. Alpha Trust Mutual |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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