Correlation Between PT Bank and Piraeus Financial
Can any of the company-specific risk be diversified away by investing in both PT Bank and Piraeus Financial 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 PT Bank and Piraeus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Central and Piraeus Financial Holdings, you can compare the effects of market volatilities on PT Bank and Piraeus Financial 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 PT Bank with a short position of Piraeus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Piraeus Financial.
Diversification Opportunities for PT Bank and Piraeus Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PBCRF and Piraeus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Piraeus Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Financial and PT 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 PT Bank Central are associated (or correlated) with Piraeus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Financial has no effect on the direction of PT Bank i.e., PT Bank and Piraeus Financial go up and down completely randomly.
Pair Corralation between PT Bank and Piraeus Financial
Assuming the 90 days horizon PT Bank is expected to generate 3.19 times less return on investment than Piraeus Financial. But when comparing it to its historical volatility, PT Bank Central is 1.2 times less risky than Piraeus Financial. It trades about 0.04 of its potential returns per unit of risk. Piraeus Financial Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 330.00 in Piraeus Financial Holdings on September 1, 2024 and sell it today you would earn a total of 49.00 from holding Piraeus Financial Holdings or generate 14.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 14.77% |
| Values | Daily Returns |
PT Bank Central vs. Piraeus Financial Holdings
Performance |
| Timeline |
| PT Bank Central |
| Piraeus Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PT Bank and Piraeus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Piraeus Financial
The main advantage of trading using opposite PT Bank and Piraeus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Piraeus Financial 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 Financial will offset losses from the drop in Piraeus Financial's long position.| PT Bank vs. Piraeus Bank SA | PT Bank vs. Turkiye Garanti Bankasi | PT Bank vs. Delhi Bank Corp | PT Bank vs. Uwharrie Capital Corp |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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