Correlation Between Piraeus Financial and National Bank
Can any of the company-specific risk be diversified away by investing in both Piraeus Financial and National 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 Piraeus Financial and National Bank 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 National Bank of, you can compare the effects of market volatilities on Piraeus Financial and National 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 Piraeus Financial with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piraeus Financial and National Bank.
Diversification Opportunities for Piraeus Financial and National Bank
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Piraeus and National is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Financial Holdings and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Piraeus Financial i.e., Piraeus Financial and National Bank go up and down completely randomly.
Pair Corralation between Piraeus Financial and National Bank
Assuming the 90 days trading horizon Piraeus Financial Holdings is expected to generate 1.07 times more return on investment than National Bank. However, Piraeus Financial is 1.07 times more volatile than National Bank of. It trades about -0.05 of its potential returns per unit of risk. National Bank of is currently generating about -0.09 per unit of risk. If you would invest 371.00 in Piraeus Financial Holdings on August 24, 2024 and sell it today you would lose (8.00) from holding Piraeus Financial Holdings or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Piraeus Financial Holdings vs. National Bank of
Performance |
| Timeline |
| Piraeus Financial |
| National Bank |
Piraeus Financial and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piraeus Financial and National Bank
The main advantage of trading using opposite Piraeus Financial and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piraeus Financial position performs unexpectedly, National 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 National Bank will offset losses from the drop in National Bank's long position.| Piraeus Financial vs. National Bank of | Piraeus Financial vs. Alpha Services and | Piraeus Financial vs. EL D Mouzakis | Piraeus Financial vs. Lampsa Hellenic Hotels |
| National Bank vs. Alpha Services and | National Bank vs. Eurobank Ergasias Services | National Bank vs. Piraeus Financial Holdings | National Bank 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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