Correlation Between Piraeus Financial and Optronics Technologies
Can any of the company-specific risk be diversified away by investing in both Piraeus Financial and Optronics Technologies 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 Optronics Technologies 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 Optronics Technologies SA, you can compare the effects of market volatilities on Piraeus Financial and Optronics Technologies 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 Optronics Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piraeus Financial and Optronics Technologies.
Diversification Opportunities for Piraeus Financial and Optronics Technologies
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Piraeus and Optronics is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Financial Holdings and Optronics Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optronics Technologies 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 Optronics Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optronics Technologies has no effect on the direction of Piraeus Financial i.e., Piraeus Financial and Optronics Technologies go up and down completely randomly.
Pair Corralation between Piraeus Financial and Optronics Technologies
Assuming the 90 days trading horizon Piraeus Financial Holdings is expected to generate 0.94 times more return on investment than Optronics Technologies. However, Piraeus Financial Holdings is 1.06 times less risky than Optronics Technologies. It trades about 0.1 of its potential returns per unit of risk. Optronics Technologies SA is currently generating about -0.01 per unit of risk. If you would invest 132.00 in Piraeus Financial Holdings on August 30, 2024 and sell it today you would earn a total of 217.00 from holding Piraeus Financial Holdings or generate 164.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Piraeus Financial Holdings vs. Optronics Technologies SA
Performance |
| Timeline |
| Piraeus Financial |
| Optronics Technologies |
Piraeus Financial and Optronics Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piraeus Financial and Optronics Technologies
The main advantage of trading using opposite Piraeus Financial and Optronics Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piraeus Financial position performs unexpectedly, Optronics Technologies 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 Optronics Technologies will offset losses from the drop in Optronics Technologies' long position.| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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