Correlation Between Greek Organization and Optima Bank
Can any of the company-specific risk be diversified away by investing in both Greek Organization and Optima 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 Greek Organization and Optima Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greek Organization of and Optima bank SA, you can compare the effects of market volatilities on Greek Organization and Optima 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 Greek Organization with a short position of Optima Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greek Organization and Optima Bank.
Diversification Opportunities for Greek Organization and Optima Bank
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Greek and Optima is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Greek Organization of and Optima bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optima bank SA and Greek Organization 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 Greek Organization of are associated (or correlated) with Optima Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optima bank SA has no effect on the direction of Greek Organization i.e., Greek Organization and Optima Bank go up and down completely randomly.
Pair Corralation between Greek Organization and Optima Bank
Assuming the 90 days trading horizon Greek Organization is expected to generate 1.06 times less return on investment than Optima Bank. But when comparing it to its historical volatility, Greek Organization of is 1.29 times less risky than Optima Bank. It trades about 0.08 of its potential returns per unit of risk. Optima bank SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,140 in Optima bank SA on August 30, 2024 and sell it today you would earn a total of 130.00 from holding Optima bank SA or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greek Organization of vs. Optima bank SA
Performance |
| Timeline |
| Greek Organization |
| Optima bank SA |
Greek Organization and Optima Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greek Organization and Optima Bank
The main advantage of trading using opposite Greek Organization and Optima Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greek Organization position performs unexpectedly, Optima 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 Optima Bank will offset losses from the drop in Optima Bank's long position.| Greek Organization vs. Mytilineos SA | Greek Organization vs. Hellenic Telecommunications Organization | Greek Organization vs. Motor Oil Corinth | Greek Organization vs. Alpha Services and |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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