Correlation Between First Horizon and Piraeus Bank
Can any of the company-specific risk be diversified away by investing in both First Horizon 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 First Horizon and Piraeus Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Horizon National and Piraeus Bank SA, you can compare the effects of market volatilities on First Horizon 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 First Horizon with a short position of Piraeus Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Horizon and Piraeus Bank.
Diversification Opportunities for First Horizon and Piraeus Bank
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Piraeus is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding First Horizon National 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 First Horizon 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 First Horizon National 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 First Horizon i.e., First Horizon and Piraeus Bank go up and down completely randomly.
Pair Corralation between First Horizon and Piraeus Bank
Considering the 90-day investment horizon First Horizon National is expected to generate 0.8 times more return on investment than Piraeus Bank. However, First Horizon National is 1.26 times less risky than Piraeus Bank. It trades about 0.11 of its potential returns per unit of risk. Piraeus Bank SA is currently generating about 0.03 per unit of risk. If you would invest 1,316 in First Horizon National on November 3, 2024 and sell it today you would earn a total of 873.00 from holding First Horizon National or generate 66.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.6% |
Values | Daily Returns |
First Horizon National vs. Piraeus Bank SA
Performance |
Timeline |
First Horizon National |
Piraeus Bank SA |
First Horizon and Piraeus Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Horizon and Piraeus Bank
The main advantage of trading using opposite First Horizon and Piraeus Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Horizon 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.First Horizon vs. Zions Bancorporation | First Horizon vs. KeyCorp | First Horizon vs. Comerica | First Horizon vs. Western Alliance Bancorporation |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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