Correlation Between Eurobank Ergasias and Commercial International

Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias and Commercial International 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 Eurobank Ergasias and Commercial International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eurobank Ergasias Services and Commercial International Bank, you can compare the effects of market volatilities on Eurobank Ergasias and Commercial International 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 Eurobank Ergasias with a short position of Commercial International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and Commercial International.

Diversification Opportunities for Eurobank Ergasias and Commercial International

0.25

Correlation Coefficient

Eurobank Ergasias  Commercial International

Modest diversification

The 3 months correlation between Eurobank and Commercial is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services and Commercial International Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial International and Eurobank Ergasias 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 Eurobank Ergasias Services are associated (or correlated) with Commercial International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial International has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and Commercial International go up and down completely randomly.

Pair Corralation between Eurobank Ergasias and Commercial International

Assuming the 90 days horizon Eurobank Ergasias Services is expected to generate 1.44 times more return on investment than Commercial International. However, Eurobank Ergasias is 1.44 times more volatile than Commercial International Bank. It trades about 0.22 of its potential returns per unit of risk. Commercial International Bank is currently generating about -0.38 per unit of risk. If you would invest  209.00  in Eurobank Ergasias Services on October 10, 2024 and sell it today you would earn a total of  15.00  from holding Eurobank Ergasias Services or generate 7.18% return on investment over 90 days.

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

Eurobank Ergasias Services  vs.  Commercial International Bank

Eurobank Ergasias

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias Services are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Eurobank Ergasias is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Commercial International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Commercial International Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Eurobank Ergasias and Commercial International

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

The idea behind Eurobank Ergasias Services and Commercial International Bank 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.