Correlation Between National Bank and Piraeus Bank
Can any of the company-specific risk be diversified away by investing in both National 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 National 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 National Bank of and Piraeus Bank SA, you can compare the effects of market volatilities on National 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 National Bank with a short position of Piraeus Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Piraeus Bank.
Diversification Opportunities for National Bank and Piraeus Bank
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Piraeus is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of 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 National 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 National Bank of 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 National Bank i.e., National Bank and Piraeus Bank go up and down completely randomly.
Pair Corralation between National Bank and Piraeus Bank
Assuming the 90 days horizon National Bank of is expected to under-perform the Piraeus Bank. But the pink sheet apears to be less risky and, when comparing its historical volatility, National Bank of is 1.18 times less risky than Piraeus Bank. The pink sheet trades about -0.19 of its potential returns per unit of risk. The Piraeus Bank SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 366.00 in Piraeus Bank SA on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Piraeus Bank SA or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Piraeus Bank SA
Performance |
| Timeline |
| National Bank |
| Piraeus Bank SA |
National Bank and Piraeus Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Piraeus Bank
The main advantage of trading using opposite National Bank and Piraeus Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National 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.| National Bank vs. Alpha Bank SA | National Bank vs. Eurobank Ergasias SA | National Bank vs. Piraeus Bank SA | National Bank vs. PT Bank Central |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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