Correlation Between JAPAN POST and Eurobank Ergasias
Can any of the company-specific risk be diversified away by investing in both JAPAN POST and Eurobank Ergasias 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 JAPAN POST and Eurobank Ergasias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN POST BANK and Eurobank Ergasias SA, you can compare the effects of market volatilities on JAPAN POST and Eurobank Ergasias 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 JAPAN POST with a short position of Eurobank Ergasias. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN POST and Eurobank Ergasias.
Diversification Opportunities for JAPAN POST and Eurobank Ergasias
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JAPAN and Eurobank is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN POST BANK and Eurobank Ergasias SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and JAPAN POST 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 JAPAN POST BANK are associated (or correlated) with Eurobank Ergasias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurobank Ergasias has no effect on the direction of JAPAN POST i.e., JAPAN POST and Eurobank Ergasias go up and down completely randomly.
Pair Corralation between JAPAN POST and Eurobank Ergasias
Assuming the 90 days horizon JAPAN POST is expected to generate 6.16 times less return on investment than Eurobank Ergasias. But when comparing it to its historical volatility, JAPAN POST BANK is 1.73 times less risky than Eurobank Ergasias. It trades about 0.09 of its potential returns per unit of risk. Eurobank Ergasias SA is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 106.00 in Eurobank Ergasias SA on November 3, 2024 and sell it today you would earn a total of 20.00 from holding Eurobank Ergasias SA or generate 18.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN POST BANK vs. Eurobank Ergasias SA
Performance |
| Timeline |
| JAPAN POST BANK |
| Eurobank Ergasias |
JAPAN POST and Eurobank Ergasias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN POST and Eurobank Ergasias
The main advantage of trading using opposite JAPAN POST and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN POST position performs unexpectedly, Eurobank Ergasias 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 Eurobank Ergasias will offset losses from the drop in Eurobank Ergasias' long position.| JAPAN POST vs. Bankinter SA ADR | JAPAN POST vs. First Horizon | JAPAN POST vs. JAPAN POST BANK | JAPAN POST vs. CaixaBank SA |
| Eurobank Ergasias vs. National Bank of | Eurobank Ergasias vs. Piraeus Bank SA | Eurobank Ergasias vs. Alpha Bank SA | Eurobank Ergasias 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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