Correlation Between Optima Bank and Pipe Works
Can any of the company-specific risk be diversified away by investing in both Optima Bank and Pipe Works 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 Pipe Works 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 Pipe Works L, you can compare the effects of market volatilities on Optima Bank and Pipe Works 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 Pipe Works. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Bank and Pipe Works.
Diversification Opportunities for Optima Bank and Pipe Works
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Optima and Pipe is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Optima bank SA and Pipe Works L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pipe Works L 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 Pipe Works. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pipe Works L has no effect on the direction of Optima Bank i.e., Optima Bank and Pipe Works go up and down completely randomly.
Pair Corralation between Optima Bank and Pipe Works
Assuming the 90 days trading horizon Optima bank SA is expected to under-perform the Pipe Works. But the stock apears to be less risky and, when comparing its historical volatility, Optima bank SA is 1.85 times less risky than Pipe Works. The stock trades about -0.05 of its potential returns per unit of risk. The Pipe Works L is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 139.00 in Pipe Works L on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Pipe Works L or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima bank SA vs. Pipe Works L
Performance |
| Timeline |
| Optima bank SA |
| Pipe Works L |
Optima Bank and Pipe Works Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Bank and Pipe Works
The main advantage of trading using opposite Optima Bank and Pipe Works positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Bank position performs unexpectedly, Pipe Works 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 Pipe Works will offset losses from the drop in Pipe Works' 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 |
| Pipe Works vs. Logismos Information Systems | Pipe Works vs. Profile Systems Software | Pipe Works vs. Daios Plastics SA | Pipe Works vs. Performance Technologies SA |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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