Correlation Between Piraeus Bank and Harbor Bankshares

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

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

Diversification Opportunities for Piraeus Bank and Harbor Bankshares

0.52

Correlation Coefficient

Piraeus Bank  Harbor Bankshares

Very weak diversification

The 3 months correlation between Piraeus and Harbor is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Bank SA and Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Bankshares and Piraeus Bank 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 Bank SA are associated (or correlated) with Harbor Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Bankshares has no effect on the direction of Piraeus Bank i.e., Piraeus Bank and Harbor Bankshares go up and down completely randomly.

Pair Corralation between Piraeus Bank and Harbor Bankshares

Assuming the 90 days horizon Piraeus Bank SA is expected to generate 0.7 times more return on investment than Harbor Bankshares. However, Piraeus Bank SA is 1.44 times less risky than Harbor Bankshares. It trades about 0.21 of its potential returns per unit of risk. Harbor Bankshares is currently generating about 0.14 per unit of risk. If you would invest  410.00  in Piraeus Bank SA on December 29, 2024 and sell it today you would earn a total of  170.00  from holding Piraeus Bank SA or generate 41.46% return on investment over 90 days.

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

Piraeus Bank SA  vs.  Harbor Bankshares

Piraeus Bank SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Piraeus Bank SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Piraeus Bank showed solid returns over the last few months and may actually be approaching a breakup point.

Harbor Bankshares

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Bankshares are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Harbor Bankshares disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Piraeus Bank and Harbor Bankshares

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

The idea behind Piraeus Bank SA and Harbor Bankshares 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.