Correlation Between NYSE Composite and Eurobank Ergasias
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Eurobank Ergasias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Eurobank Ergasias SA, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Eurobank Ergasias. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Eurobank Ergasias.
Diversification Opportunities for NYSE Composite and Eurobank Ergasias
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Eurobank is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Eurobank Ergasias SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Eurobank Ergasias go up and down completely randomly.
Pair Corralation between NYSE Composite and Eurobank Ergasias
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Eurobank Ergasias. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 4.24 times less risky than Eurobank Ergasias. The index trades about -0.17 of its potential returns per unit of risk. The Eurobank Ergasias SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 126.00 in Eurobank Ergasias SA on December 8, 2024 and sell it today you would earn a total of 8.00 from holding Eurobank Ergasias SA or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Eurobank Ergasias SA
Performance |
| Timeline |
NYSE Composite and Eurobank Ergasias Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Eurobank Ergasias SA
Pair trading matchups for Eurobank Ergasias
Pair Trading with NYSE Composite and Eurobank Ergasias
The main advantage of trading using opposite NYSE Composite and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Chubb | ||
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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