Correlation Between Washington Trust and Piraeus Financial
Can any of the company-specific risk be diversified away by investing in both Washington Trust and Piraeus Financial 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 Washington Trust and Piraeus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Trust Bancorp and Piraeus Financial Holdings, you can compare the effects of market volatilities on Washington Trust and Piraeus Financial 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 Washington Trust with a short position of Piraeus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Trust and Piraeus Financial.
Diversification Opportunities for Washington Trust and Piraeus Financial
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Washington and Piraeus is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Washington Trust Bancorp and Piraeus Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Financial and Washington Trust 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 Washington Trust Bancorp are associated (or correlated) with Piraeus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Financial has no effect on the direction of Washington Trust i.e., Washington Trust and Piraeus Financial go up and down completely randomly.
Pair Corralation between Washington Trust and Piraeus Financial
Given the investment horizon of 90 days Washington Trust Bancorp is expected to under-perform the Piraeus Financial. But the stock apears to be less risky and, when comparing its historical volatility, Washington Trust Bancorp is 1.99 times less risky than Piraeus Financial. The stock trades about -0.01 of its potential returns per unit of risk. The Piraeus Financial Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Piraeus Financial Holdings on October 14, 2024 and sell it today you would earn a total of 229.00 from holding Piraeus Financial Holdings or generate 152.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 34.27% |
| Values | Daily Returns |
Washington Trust Bancorp vs. Piraeus Financial Holdings
Performance |
| Timeline |
| Washington Trust Bancorp |
| Piraeus Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Washington Trust and Piraeus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Trust and Piraeus Financial
The main advantage of trading using opposite Washington Trust and Piraeus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Trust position performs unexpectedly, Piraeus Financial 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 Piraeus Financial will offset losses from the drop in Piraeus Financial's long position.| Washington Trust vs. Univest Pennsylvania | Washington Trust vs. Waterstone Financial | Washington Trust vs. Mid Penn Bancorp | Washington Trust vs. ST Bancorp |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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