Correlation Between PT Bank and Piraeus Bank
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and Piraeus Bank 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 Bank SA, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of Piraeus Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Piraeus Bank.
Diversification Opportunities for PT Bank and Piraeus Bank
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PBCRF and Piraeus is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central 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 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 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 PT Bank i.e., PT Bank and Piraeus Bank go up and down completely randomly.
Pair Corralation between PT Bank and Piraeus Bank
Assuming the 90 days horizon PT Bank is expected to generate 7.96 times less return on investment than Piraeus Bank. In addition to that, PT Bank is 1.93 times more volatile than Piraeus Bank SA. It trades about 0.02 of its total potential returns per unit of risk. Piraeus Bank SA is currently generating about 0.33 per unit of volatility. If you would invest 405.00 in Piraeus Bank SA on October 24, 2024 and sell it today you would earn a total of 57.00 from holding Piraeus Bank SA or generate 14.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PT Bank Central vs. Piraeus Bank SA
Performance |
Timeline |
PT Bank Central |
Piraeus Bank SA |
PT Bank and Piraeus Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Bank and Piraeus Bank
The main advantage of trading using opposite PT Bank and Piraeus Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.PT Bank vs. Commercial International Bank | PT Bank vs. Caixabank SA ADR | PT Bank vs. Bank Rakyat | PT Bank vs. Lloyds Banking Group |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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