Correlation Between Piraeus Financial and Mytilineos
Can any of the company-specific risk be diversified away by investing in both Piraeus Financial and Mytilineos 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 Mytilineos 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 Mytilineos SA, you can compare the effects of market volatilities on Piraeus Financial and Mytilineos 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 Mytilineos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piraeus Financial and Mytilineos.
Diversification Opportunities for Piraeus Financial and Mytilineos
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Piraeus and Mytilineos is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Financial Holdings and Mytilineos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mytilineos SA 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 Mytilineos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mytilineos SA has no effect on the direction of Piraeus Financial i.e., Piraeus Financial and Mytilineos go up and down completely randomly.
Pair Corralation between Piraeus Financial and Mytilineos
Assuming the 90 days trading horizon Piraeus Financial Holdings is expected to generate 1.29 times more return on investment than Mytilineos. However, Piraeus Financial is 1.29 times more volatile than Mytilineos SA. It trades about 0.04 of its potential returns per unit of risk. Mytilineos SA is currently generating about -0.03 per unit of risk. If you would invest 312.00 in Piraeus Financial Holdings on August 24, 2024 and sell it today you would earn a total of 51.00 from holding Piraeus Financial Holdings or generate 16.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Piraeus Financial Holdings vs. Mytilineos SA
Performance |
| Timeline |
| Piraeus Financial |
| Mytilineos SA |
Piraeus Financial and Mytilineos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piraeus Financial and Mytilineos
The main advantage of trading using opposite Piraeus Financial and Mytilineos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piraeus Financial position performs unexpectedly, Mytilineos 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 Mytilineos will offset losses from the drop in Mytilineos' 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 |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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