Correlation Between Bank of Greece and Foodlink
Can any of the company-specific risk be diversified away by investing in both Bank of Greece and Foodlink 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 Foodlink 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 Foodlink AE, you can compare the effects of market volatilities on Bank of Greece and Foodlink 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 Foodlink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Greece and Foodlink.
Diversification Opportunities for Bank of Greece and Foodlink
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Foodlink is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Greece and Foodlink AE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodlink AE 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 Foodlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodlink AE has no effect on the direction of Bank of Greece i.e., Bank of Greece and Foodlink go up and down completely randomly.
Pair Corralation between Bank of Greece and Foodlink
Assuming the 90 days trading horizon Bank of Greece is expected to generate 312.97 times less return on investment than Foodlink. But when comparing it to its historical volatility, Bank of Greece is 3.41 times less risky than Foodlink. It trades about 0.0 of its potential returns per unit of risk. Foodlink AE is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Foodlink AE on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Foodlink AE or generate 21.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Greece vs. Foodlink AE
Performance |
| Timeline |
| Bank of Greece |
| Foodlink AE |
Bank of Greece and Foodlink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Greece and Foodlink
The main advantage of trading using opposite Bank of Greece and Foodlink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Greece position performs unexpectedly, Foodlink 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 Foodlink will offset losses from the drop in Foodlink'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 |
| Foodlink vs. Autohellas SA | Foodlink vs. Public Power | Foodlink vs. Profile Systems Software | Foodlink vs. National Bank 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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