Correlation Between Piraeus Financial and Sidma SA
Can any of the company-specific risk be diversified away by investing in both Piraeus Financial and Sidma SA 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 Sidma SA 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 Sidma SA Steel, you can compare the effects of market volatilities on Piraeus Financial and Sidma SA 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 Sidma SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piraeus Financial and Sidma SA.
Diversification Opportunities for Piraeus Financial and Sidma SA
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Piraeus and Sidma is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Financial Holdings and Sidma SA Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidma SA Steel 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 Sidma SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidma SA Steel has no effect on the direction of Piraeus Financial i.e., Piraeus Financial and Sidma SA go up and down completely randomly.
Pair Corralation between Piraeus Financial and Sidma SA
Assuming the 90 days trading horizon Piraeus Financial Holdings is expected to generate 1.19 times more return on investment than Sidma SA. However, Piraeus Financial is 1.19 times more volatile than Sidma SA Steel. It trades about 0.07 of its potential returns per unit of risk. Sidma SA Steel is currently generating about -0.05 per unit of risk. If you would invest 221.00 in Piraeus Financial Holdings on November 5, 2024 and sell it today you would earn a total of 217.00 from holding Piraeus Financial Holdings or generate 98.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Piraeus Financial Holdings vs. Sidma SA Steel
Performance |
| Timeline |
| Piraeus Financial |
| Sidma SA Steel |
Piraeus Financial and Sidma SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piraeus Financial and Sidma SA
The main advantage of trading using opposite Piraeus Financial and Sidma SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piraeus Financial position performs unexpectedly, Sidma SA 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 Sidma SA will offset losses from the drop in Sidma SA's long position.| Piraeus Financial vs. Sidma SA Steel | Piraeus Financial vs. Elvalhalcor Hellenic Copper | Piraeus Financial vs. Foodlink AE | Piraeus Financial vs. Intracom Constructions Societe |
| Sidma SA vs. Daios Plastics SA | Sidma SA vs. Profile Systems Software | Sidma SA vs. Hellenic Telecommunications Organization | Sidma SA vs. CPI Computer Peripherals |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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