Correlation Between Prodea Real and Bank of Greece
Can any of the company-specific risk be diversified away by investing in both Prodea Real and Bank of Greece 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 Prodea Real and Bank of Greece into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prodea Real Estate and Bank of Greece, you can compare the effects of market volatilities on Prodea Real and Bank of Greece 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 Prodea Real with a short position of Bank of Greece. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prodea Real and Bank of Greece.
Diversification Opportunities for Prodea Real and Bank of Greece
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prodea and Bank is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Prodea Real Estate and Bank of Greece in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Greece and Prodea Real 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 Prodea Real Estate are associated (or correlated) with Bank of Greece. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Greece has no effect on the direction of Prodea Real i.e., Prodea Real and Bank of Greece go up and down completely randomly.
Pair Corralation between Prodea Real and Bank of Greece
Assuming the 90 days trading horizon Prodea Real Estate is expected to generate 4.94 times more return on investment than Bank of Greece. However, Prodea Real is 4.94 times more volatile than Bank of Greece. It trades about 0.02 of its potential returns per unit of risk. Bank of Greece is currently generating about -0.02 per unit of risk. If you would invest 620.00 in Prodea Real Estate on September 5, 2024 and sell it today you would earn a total of 0.00 from holding Prodea Real Estate or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Prodea Real Estate vs. Bank of Greece
Performance |
| Timeline |
| Prodea Real Estate |
| Bank of Greece |
Prodea Real and Bank of Greece Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prodea Real and Bank of Greece
The main advantage of trading using opposite Prodea Real and Bank of Greece positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prodea Real position performs unexpectedly, Bank of Greece 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 Bank of Greece will offset losses from the drop in Bank of Greece's long position.| Prodea Real vs. Bank of Greece | Prodea Real vs. Marfin Investment Group | Prodea Real vs. Hellenic Telecommunications Organization | Prodea Real vs. Elvalhalcor Hellenic Copper |
| Bank of Greece vs. Alpha Services and | Bank of Greece vs. Piraeus Financial Holdings | Bank of Greece vs. National Bank of | Bank of Greece vs. Greek Organization of |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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