Correlation Between Alpha Trust and Bank of Greece

Can any of the company-specific risk be diversified away by investing in both Alpha Trust and Bank of Greece 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 Alpha Trust and Bank of Greece into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alpha Trust Mutual and Bank of Greece, you can compare the effects of market volatilities on Alpha Trust and Bank of Greece 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 Alpha Trust with a short position of Bank of Greece. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Trust and Bank of Greece.

Diversification Opportunities for Alpha Trust and Bank of Greece

-0.06

Correlation Coefficient

Alpha Trust  Bank of Greece

Good diversification

The 3 months correlation between Alpha and Bank is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Trust Mutual and Bank of Greece in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Greece and Alpha 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 Alpha Trust Mutual are associated (or correlated) with Bank of Greece. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Greece has no effect on the direction of Alpha Trust i.e., Alpha Trust and Bank of Greece go up and down completely randomly.

Pair Corralation between Alpha Trust and Bank of Greece

Assuming the 90 days trading horizon Alpha Trust Mutual is expected to under-perform the Bank of Greece. But the stock apears to be less risky and, when comparing its historical volatility, Alpha Trust Mutual is 1.97 times less risky than Bank of Greece. The stock trades about -0.03 of its potential returns per unit of risk. The Bank of Greece is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,475  in Bank of Greece on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Bank of Greece or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Alpha Trust Mutual  vs.  Bank of Greece

Alpha Trust Mutual

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alpha Trust Mutual has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Alpha Trust is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Bank of Greece

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank of Greece has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bank of Greece is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Alpha Trust and Bank of Greece

The main advantage of trading using opposite Alpha Trust and Bank of Greece positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Trust position performs unexpectedly, Bank of Greece 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 Bank of Greece will offset losses from the drop in Bank of Greece's long position.

The idea behind Alpha Trust Mutual and Bank of Greece pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.