Correlation Between Piraeus Bank and Schweizerische Nationalbank

Can any of the company-specific risk be diversified away by investing in both Piraeus Bank and Schweizerische Nationalbank 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 Schweizerische Nationalbank 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 Schweizerische Nationalbank, you can compare the effects of market volatilities on Piraeus Bank and Schweizerische Nationalbank 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 Schweizerische Nationalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piraeus Bank and Schweizerische Nationalbank.

Diversification Opportunities for Piraeus Bank and Schweizerische Nationalbank

0.53

Correlation Coefficient

Piraeus Bank  Schweizerische Nationalbank

Very weak diversification

The 3 months correlation between Piraeus and Schweizerische is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Bank SA and Schweizerische Nationalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweizerische Nationalbank 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 Schweizerische Nationalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweizerische Nationalbank has no effect on the direction of Piraeus Bank i.e., Piraeus Bank and Schweizerische Nationalbank go up and down completely randomly.

Pair Corralation between Piraeus Bank and Schweizerische Nationalbank

Assuming the 90 days horizon Piraeus Bank SA is expected to generate 1.15 times more return on investment than Schweizerische Nationalbank. However, Piraeus Bank is 1.15 times more volatile than Schweizerische Nationalbank. It trades about 0.02 of its potential returns per unit of risk. Schweizerische Nationalbank is currently generating about -0.22 per unit of risk. If you would invest  363.00  in Piraeus Bank SA on September 1, 2024 and sell it today you would earn a total of  2.00  from holding Piraeus Bank SA or generate 0.55% 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.  Schweizerische Nationalbank

Piraeus Bank SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Piraeus Bank SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Schweizerische Nationalbank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schweizerische Nationalbank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Piraeus Bank and Schweizerische Nationalbank

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

The idea behind Piraeus Bank SA and Schweizerische Nationalbank 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.