Correlation Between Bank of Greece and Dromeas SA
Can any of the company-specific risk be diversified away by investing in both Bank of Greece and Dromeas SA 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 Bank of Greece and Dromeas SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Greece and Dromeas SA, you can compare the effects of market volatilities on Bank of Greece and Dromeas SA 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 Bank of Greece with a short position of Dromeas SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Greece and Dromeas SA.
Diversification Opportunities for Bank of Greece and Dromeas SA
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Dromeas is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Greece and Dromeas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dromeas SA and Bank of Greece 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 Bank of Greece are associated (or correlated) with Dromeas SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dromeas SA has no effect on the direction of Bank of Greece i.e., Bank of Greece and Dromeas SA go up and down completely randomly.
Pair Corralation between Bank of Greece and Dromeas SA
Assuming the 90 days trading horizon Bank of Greece is expected to under-perform the Dromeas SA. But the stock apears to be less risky and, when comparing its historical volatility, Bank of Greece is 2.5 times less risky than Dromeas SA. The stock trades about -0.05 of its potential returns per unit of risk. The Dromeas SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 33.00 in Dromeas SA on August 27, 2024 and sell it today you would lose (4.00) from holding Dromeas SA or give up 12.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Greece vs. Dromeas SA
Performance |
| Timeline |
| Bank of Greece |
| Dromeas SA |
Bank of Greece and Dromeas SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Greece and Dromeas SA
The main advantage of trading using opposite Bank of Greece and Dromeas SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Greece position performs unexpectedly, Dromeas SA 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 Dromeas SA will offset losses from the drop in Dromeas SA's long position.| Bank of Greece vs. Eurobank Ergasias Services | Bank of Greece vs. National Bank of | Bank of Greece vs. EL D Mouzakis | Bank of Greece vs. Lampsa Hellenic Hotels |
| Dromeas SA vs. National Bank of | Dromeas SA vs. EL D Mouzakis | Dromeas SA vs. Lampsa Hellenic Hotels | Dromeas SA vs. Austriacard Holdings AG |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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