Correlation Between Itau Unibanco and Piraeus Financial
Can any of the company-specific risk be diversified away by investing in both Itau Unibanco and Piraeus Financial 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 Itau Unibanco and Piraeus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itau Unibanco Banco and Piraeus Financial Holdings, you can compare the effects of market volatilities on Itau Unibanco and Piraeus Financial 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 Itau Unibanco with a short position of Piraeus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itau Unibanco and Piraeus Financial.
Diversification Opportunities for Itau Unibanco and Piraeus Financial
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Itau and Piraeus is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Itau Unibanco Banco and Piraeus Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Financial and Itau Unibanco 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 Itau Unibanco Banco are associated (or correlated) with Piraeus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Financial has no effect on the direction of Itau Unibanco i.e., Itau Unibanco and Piraeus Financial go up and down completely randomly.
Pair Corralation between Itau Unibanco and Piraeus Financial
Given the investment horizon of 90 days Itau Unibanco Banco is expected to generate 1.29 times more return on investment than Piraeus Financial. However, Itau Unibanco is 1.29 times more volatile than Piraeus Financial Holdings. It trades about -0.02 of its potential returns per unit of risk. Piraeus Financial Holdings is currently generating about -0.12 per unit of risk. If you would invest 634.00 in Itau Unibanco Banco on November 3, 2024 and sell it today you would lose (54.00) from holding Itau Unibanco Banco or give up 8.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 17.2% |
| Values | Daily Returns |
Itau Unibanco Banco vs. Piraeus Financial Holdings
Performance |
| Timeline |
| Itau Unibanco Banco |
| Piraeus Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Itau Unibanco and Piraeus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itau Unibanco and Piraeus Financial
The main advantage of trading using opposite Itau Unibanco and Piraeus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itau Unibanco position performs unexpectedly, Piraeus Financial 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 Financial will offset losses from the drop in Piraeus Financial's long position.| Itau Unibanco vs. Grupo Financiero Galicia | Itau Unibanco vs. Banco Macro SA | Itau Unibanco vs. Banco Santander Brasil | Itau Unibanco vs. Lloyds Banking Group |
| Piraeus Financial vs. Alpha Bank SA | Piraeus Financial vs. Eurobank Ergasias SA | Piraeus Financial vs. Piraeus Bank SA | Piraeus Financial vs. First Citizens BancShares |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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