Correlation Between Marfin Investment and Piraeus Financial
Can any of the company-specific risk be diversified away by investing in both Marfin Investment 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 Marfin Investment and Piraeus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marfin Investment Group and Piraeus Financial Holdings, you can compare the effects of market volatilities on Marfin Investment 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 Marfin Investment with a short position of Piraeus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfin Investment and Piraeus Financial.
Diversification Opportunities for Marfin Investment and Piraeus Financial
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Marfin and Piraeus is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Marfin Investment Group and Piraeus Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Financial and Marfin Investment 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 Marfin Investment Group 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 Marfin Investment i.e., Marfin Investment and Piraeus Financial go up and down completely randomly.
Pair Corralation between Marfin Investment and Piraeus Financial
Assuming the 90 days trading horizon Marfin Investment Group is expected to under-perform the Piraeus Financial. In addition to that, Marfin Investment is 1.5 times more volatile than Piraeus Financial Holdings. It trades about -0.1 of its total potential returns per unit of risk. Piraeus Financial Holdings is currently generating about -0.05 per unit of volatility. If you would invest 357.00 in Piraeus Financial Holdings on August 30, 2024 and sell it today you would lose (8.00) from holding Piraeus Financial Holdings or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marfin Investment Group vs. Piraeus Financial Holdings
Performance |
| Timeline |
| Marfin Investment |
| Piraeus Financial |
Marfin Investment and Piraeus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfin Investment and Piraeus Financial
The main advantage of trading using opposite Marfin Investment and Piraeus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfin Investment 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.| Marfin Investment vs. National Bank of | Marfin Investment vs. EL D Mouzakis | Marfin Investment vs. Lampsa Hellenic Hotels | Marfin Investment vs. Eurobank Ergasias Services |
| Piraeus Financial vs. Eurobank Ergasias Services | Piraeus Financial vs. Greek Organization of | Piraeus Financial vs. Mytilineos SA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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