Correlation Between Piraeus Financial and Selected Textiles
Can any of the company-specific risk be diversified away by investing in both Piraeus Financial and Selected Textiles 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 Piraeus Financial and Selected Textiles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Piraeus Financial Holdings and Selected Textiles SA, you can compare the effects of market volatilities on Piraeus Financial and Selected Textiles 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 Piraeus Financial with a short position of Selected Textiles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piraeus Financial and Selected Textiles.
Diversification Opportunities for Piraeus Financial and Selected Textiles
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Piraeus and Selected is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Financial Holdings and Selected Textiles SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selected Textiles and Piraeus Financial 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 Piraeus Financial Holdings are associated (or correlated) with Selected Textiles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selected Textiles has no effect on the direction of Piraeus Financial i.e., Piraeus Financial and Selected Textiles go up and down completely randomly.
Pair Corralation between Piraeus Financial and Selected Textiles
Assuming the 90 days trading horizon Piraeus Financial is expected to generate 1.09 times less return on investment than Selected Textiles. But when comparing it to its historical volatility, Piraeus Financial Holdings is 2.14 times less risky than Selected Textiles. It trades about 0.03 of its potential returns per unit of risk. Selected Textiles SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Selected Textiles SA on August 31, 2024 and sell it today you would lose (1.00) from holding Selected Textiles SA or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.22% |
| Values | Daily Returns |
Piraeus Financial Holdings vs. Selected Textiles SA
Performance |
| Timeline |
| Piraeus Financial |
| Selected Textiles |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Piraeus Financial and Selected Textiles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piraeus Financial and Selected Textiles
The main advantage of trading using opposite Piraeus Financial and Selected Textiles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piraeus Financial position performs unexpectedly, Selected Textiles 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 Selected Textiles will offset losses from the drop in Selected Textiles' long position.| Piraeus Financial vs. Alpha Services and | Piraeus Financial vs. Eurobank Ergasias Services | Piraeus Financial vs. Greek Organization of | Piraeus Financial vs. Mytilineos SA |
| Selected Textiles vs. Technical Olympic SA | Selected Textiles vs. Iktinos Hellas SA | Selected Textiles vs. GEK TERNA Holdings | Selected Textiles vs. Fourlis Holdings SA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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