Correlation Between Eurobank Ergasias and Public Power

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

Diversification Opportunities for Eurobank Ergasias and Public Power

0.23

Correlation Coefficient

Eurobank Ergasias  Public Power

Modest diversification

The 3 months correlation between Eurobank and Public is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services and Public Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Power 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 Public Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Power has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and Public Power go up and down completely randomly.

Pair Corralation between Eurobank Ergasias and Public Power

Assuming the 90 days trading horizon Eurobank Ergasias Services is expected to generate 1.04 times more return on investment than Public Power. However, Eurobank Ergasias is 1.04 times more volatile than Public Power. It trades about 0.07 of its potential returns per unit of risk. Public Power is currently generating about 0.02 per unit of risk. If you would invest  155.00  in Eurobank Ergasias Services on September 13, 2024 and sell it today you would earn a total of  69.00  from holding Eurobank Ergasias Services or generate 44.52% 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.  Public Power

Eurobank Ergasias

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias Services are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Eurobank Ergasias sustained solid returns over the last few months and may actually be approaching a breakup point.

Public Power

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Public Power are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Public Power is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Eurobank Ergasias and Public Power

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

The idea behind Eurobank Ergasias Services and Public Power 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.