Correlation Between CNL Capital and Bank of Greece

Can any of the company-specific risk be diversified away by investing in both CNL Capital 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 CNL Capital 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 CNL Capital EKES AIFM and Bank of Greece, you can compare the effects of market volatilities on CNL Capital 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 CNL Capital with a short position of Bank of Greece. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNL Capital and Bank of Greece.

Diversification Opportunities for CNL Capital and Bank of Greece

-0.01

Correlation Coefficient

CNL Capital  Bank of Greece

Good diversification

The 3 months correlation between CNL and Bank is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding CNL Capital EKES AIFM 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 CNL Capital 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 CNL Capital EKES AIFM 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 CNL Capital i.e., CNL Capital and Bank of Greece go up and down completely randomly.

Pair Corralation between CNL Capital and Bank of Greece

Assuming the 90 days trading horizon CNL Capital EKES AIFM is expected to under-perform the Bank of Greece. But the stock apears to be less risky and, when comparing its historical volatility, CNL Capital EKES AIFM is 1.13 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 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,320  in Bank of Greece on December 2, 2024 and sell it today you would earn a total of  145.00  from holding Bank of Greece or generate 10.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

CNL Capital EKES AIFM  vs.  Bank of Greece

CNL Capital EKES

Risk-Adjusted Performance

Very Weak

Over the last 90 days CNL Capital EKES AIFM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, CNL Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bank of Greece

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Greece are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Bank of Greece may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CNL Capital and Bank of Greece

The main advantage of trading using opposite CNL Capital and Bank of Greece positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNL Capital 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 CNL Capital EKES AIFM 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.