Correlation Between Eurobank Ergasias and JAPAN POST

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

Diversification Opportunities for Eurobank Ergasias and JAPAN POST

0.0

Correlation Coefficient

Eurobank Ergasias  JAPAN POST

Pay attention - limited upside

The 3 months correlation between Eurobank and JAPAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias SA and JAPAN POST BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN POST BANK 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 JAPAN POST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN POST BANK has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and JAPAN POST go up and down completely randomly.

Pair Corralation between Eurobank Ergasias and JAPAN POST

If you would invest  104.00  in Eurobank Ergasias SA on November 28, 2024 and sell it today you would earn a total of  20.00  from holding Eurobank Ergasias SA or generate 19.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Eurobank Ergasias SA  vs.  JAPAN POST BANK

Eurobank Ergasias

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Eurobank Ergasias showed solid returns over the last few months and may actually be approaching a breakup point.

JAPAN POST BANK

Risk-Adjusted Performance

Very Weak

Over the last 90 days JAPAN POST BANK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, JAPAN POST is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eurobank Ergasias and JAPAN POST

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

The idea behind Eurobank Ergasias SA and JAPAN POST 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.