Correlation Between Washington Trust and Piraeus Bank
Can any of the company-specific risk be diversified away by investing in both Washington Trust and Piraeus 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 Washington Trust and Piraeus Bank 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 Bank SA, you can compare the effects of market volatilities on Washington Trust and Piraeus 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 Washington Trust with a short position of Piraeus Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Trust and Piraeus Bank.
Diversification Opportunities for Washington Trust and Piraeus Bank
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Washington and Piraeus is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Washington Trust Bancorp and Piraeus Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Bank SA 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 Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Bank SA has no effect on the direction of Washington Trust i.e., Washington Trust and Piraeus Bank go up and down completely randomly.
Pair Corralation between Washington Trust and Piraeus Bank
Given the investment horizon of 90 days Washington Trust Bancorp is expected to under-perform the Piraeus Bank. But the stock apears to be less risky and, when comparing its historical volatility, Washington Trust Bancorp is 1.66 times less risky than Piraeus Bank. The stock trades about -0.01 of its potential returns per unit of risk. The Piraeus Bank SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 187.00 in Piraeus Bank SA on October 14, 2024 and sell it today you would earn a total of 255.00 from holding Piraeus Bank SA or generate 136.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Trust Bancorp vs. Piraeus Bank SA
Performance |
| Timeline |
| Washington Trust Bancorp |
| Piraeus Bank SA |
Washington Trust and Piraeus Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Trust and Piraeus Bank
The main advantage of trading using opposite Washington Trust and Piraeus Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Trust position performs unexpectedly, Piraeus 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 Piraeus Bank will offset losses from the drop in Piraeus Bank'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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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