Correlation Between Optima Bank and IKloukinas ILappas
Can any of the company-specific risk be diversified away by investing in both Optima Bank and IKloukinas ILappas 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 Optima Bank and IKloukinas ILappas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima bank SA and IKloukinas ILappas SA, you can compare the effects of market volatilities on Optima Bank and IKloukinas ILappas 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 Optima Bank with a short position of IKloukinas ILappas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Bank and IKloukinas ILappas.
Diversification Opportunities for Optima Bank and IKloukinas ILappas
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Optima and IKloukinas is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Optima bank SA and IKloukinas ILappas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IKloukinas ILappas and Optima 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 Optima bank SA are associated (or correlated) with IKloukinas ILappas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IKloukinas ILappas has no effect on the direction of Optima Bank i.e., Optima Bank and IKloukinas ILappas go up and down completely randomly.
Pair Corralation between Optima Bank and IKloukinas ILappas
Assuming the 90 days trading horizon Optima Bank is expected to generate 1.2 times less return on investment than IKloukinas ILappas. But when comparing it to its historical volatility, Optima bank SA is 1.63 times less risky than IKloukinas ILappas. It trades about 0.14 of its potential returns per unit of risk. IKloukinas ILappas SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 49.00 in IKloukinas ILappas SA on September 3, 2024 and sell it today you would earn a total of 102.00 from holding IKloukinas ILappas SA or generate 208.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 59.06% |
| Values | Daily Returns |
Optima bank SA vs. IKloukinas ILappas SA
Performance |
| Timeline |
| Optima bank SA |
| IKloukinas ILappas |
Optima Bank and IKloukinas ILappas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Bank and IKloukinas ILappas
The main advantage of trading using opposite Optima Bank and IKloukinas ILappas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Bank position performs unexpectedly, IKloukinas ILappas 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 IKloukinas ILappas will offset losses from the drop in IKloukinas ILappas' long position.| Optima Bank vs. Hellenic Telecommunications Organization | Optima Bank vs. Greek Organization of | Optima Bank vs. Eurobank Ergasias Services | Optima Bank vs. National Bank of |
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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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