Correlation Between Eurobank Ergasias and First Citizens

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

By analyzing existing cross correlation between Eurobank Ergasias SA and First Citizens BancShares, you can compare the effects of market volatilities on Eurobank Ergasias and First Citizens 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 First Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and First Citizens.

Diversification Opportunities for Eurobank Ergasias and First Citizens

-0.67

Correlation Coefficient

Eurobank Ergasias  First Citizens

Excellent diversification

The 3 months correlation between Eurobank and First is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias SA and First Citizens BancShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Citizens BancShares 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 SA are associated (or correlated) with First Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Citizens BancShares has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and First Citizens go up and down completely randomly.

Pair Corralation between Eurobank Ergasias and First Citizens

Assuming the 90 days horizon Eurobank Ergasias SA is expected to generate 1.81 times more return on investment than First Citizens. However, Eurobank Ergasias is 1.81 times more volatile than First Citizens BancShares. It trades about 0.16 of its potential returns per unit of risk. First Citizens BancShares is currently generating about -0.11 per unit of risk. If you would invest  109.00  in Eurobank Ergasias SA on December 29, 2024 and sell it today you would earn a total of  38.00  from holding Eurobank Ergasias SA or generate 34.86% return on investment over 90 days.

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

Eurobank Ergasias SA  vs.  First Citizens BancShares

Eurobank Ergasias

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Eurobank Ergasias showed solid returns over the last few months and may actually be approaching a breakup point.

First Citizens BancShares

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Citizens BancShares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Eurobank Ergasias and First Citizens

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

The idea behind Eurobank Ergasias SA and First Citizens BancShares 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.