Correlation Between PacWest Bancorp and Piraeus Bank
Can any of the company-specific risk be diversified away by investing in both PacWest Bancorp and Piraeus 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 PacWest Bancorp and Piraeus Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PacWest Bancorp and Piraeus Bank SA, you can compare the effects of market volatilities on PacWest Bancorp and Piraeus 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 PacWest Bancorp with a short position of Piraeus Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of PacWest Bancorp and Piraeus Bank.
Diversification Opportunities for PacWest Bancorp and Piraeus Bank
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PacWest and Piraeus is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding PacWest Bancorp and Piraeus Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Bank SA and PacWest Bancorp 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 PacWest Bancorp are associated (or correlated) with Piraeus Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Bank SA has no effect on the direction of PacWest Bancorp i.e., PacWest Bancorp and Piraeus Bank go up and down completely randomly.
Pair Corralation between PacWest Bancorp and Piraeus Bank
If you would invest 368.00 in Piraeus Bank SA on October 23, 2024 and sell it today you would earn a total of 82.00 from holding Piraeus Bank SA or generate 22.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 2.63% |
| Values | Daily Returns |
PacWest Bancorp vs. Piraeus Bank SA
Performance |
| Timeline |
| PacWest Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Piraeus Bank SA |
PacWest Bancorp and Piraeus Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PacWest Bancorp and Piraeus Bank
The main advantage of trading using opposite PacWest Bancorp and Piraeus Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PacWest Bancorp position performs unexpectedly, Piraeus 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 Piraeus Bank will offset losses from the drop in Piraeus Bank's long position.| PacWest Bancorp vs. Zions Bancorporation | PacWest Bancorp vs. KeyCorp | PacWest Bancorp vs. Comerica | PacWest Bancorp vs. First Horizon National |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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