Correlation Between Optima Bank and Nafpaktos Textile
Can any of the company-specific risk be diversified away by investing in both Optima Bank and Nafpaktos Textile 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 Nafpaktos Textile 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 Nafpaktos Textile Industry, you can compare the effects of market volatilities on Optima Bank and Nafpaktos Textile 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 Nafpaktos Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Bank and Nafpaktos Textile.
Diversification Opportunities for Optima Bank and Nafpaktos Textile
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Optima and Nafpaktos is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Optima bank SA and Nafpaktos Textile Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nafpaktos Textile 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 Nafpaktos Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nafpaktos Textile has no effect on the direction of Optima Bank i.e., Optima Bank and Nafpaktos Textile go up and down completely randomly.
Pair Corralation between Optima Bank and Nafpaktos Textile
Assuming the 90 days trading horizon Optima bank SA is expected to under-perform the Nafpaktos Textile. But the stock apears to be less risky and, when comparing its historical volatility, Optima bank SA is 2.42 times less risky than Nafpaktos Textile. The stock trades about -0.05 of its potential returns per unit of risk. The Nafpaktos Textile Industry is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 83.00 in Nafpaktos Textile Industry on September 23, 2024 and sell it today you would lose (1.00) from holding Nafpaktos Textile Industry or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima bank SA vs. Nafpaktos Textile Industry
Performance |
| Timeline |
| Optima bank SA |
| Nafpaktos Textile |
Optima Bank and Nafpaktos Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Bank and Nafpaktos Textile
The main advantage of trading using opposite Optima Bank and Nafpaktos Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Bank position performs unexpectedly, Nafpaktos Textile 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 Nafpaktos Textile will offset losses from the drop in Nafpaktos Textile's long position.| Optima Bank vs. Coca Cola HBC AG | Optima Bank vs. Hellenic Telecommunications Organization | Optima Bank vs. Greek Organization of | Optima Bank vs. Eurobank Ergasias Services |
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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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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