Correlation Between Farmers Bank and Piraeus Bank
Can any of the company-specific risk be diversified away by investing in both Farmers Bank and Piraeus Bank 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 Farmers Bank and Piraeus Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Farmers Bank and Piraeus Bank SA, you can compare the effects of market volatilities on Farmers Bank and Piraeus Bank 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 Farmers Bank with a short position of Piraeus Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Bank and Piraeus Bank.
Diversification Opportunities for Farmers Bank and Piraeus Bank
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farmers and Piraeus is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding The Farmers Bank and Piraeus Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Bank SA and Farmers 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 The Farmers Bank are associated (or correlated) with Piraeus Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Bank SA has no effect on the direction of Farmers Bank i.e., Farmers Bank and Piraeus Bank go up and down completely randomly.
Pair Corralation between Farmers Bank and Piraeus Bank
Given the investment horizon of 90 days The Farmers Bank is expected to generate 0.43 times more return on investment than Piraeus Bank. However, The Farmers Bank is 2.34 times less risky than Piraeus Bank. It trades about 0.0 of its potential returns per unit of risk. Piraeus Bank SA is currently generating about -0.01 per unit of risk. If you would invest 2,247 in The Farmers Bank on September 3, 2024 and sell it today you would lose (27.00) from holding The Farmers Bank or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Farmers Bank vs. Piraeus Bank SA
Performance |
| Timeline |
| Farmers Bank |
| Piraeus Bank SA |
Farmers Bank and Piraeus Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Bank and Piraeus Bank
The main advantage of trading using opposite Farmers Bank and Piraeus Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Bank position performs unexpectedly, Piraeus Bank 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 Piraeus Bank will offset losses from the drop in Piraeus Bank's long position.| Farmers Bank vs. CIB Marine Bancshares | Farmers Bank vs. F M Bank | Farmers Bank vs. ENB Financial Corp | Farmers Bank vs. First Bankers Trustshares |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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