Correlation Between Intertech and Eurobank Ergasias

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

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

Diversification Opportunities for Intertech and Eurobank Ergasias

0.74

Correlation Coefficient

Intertech  Eurobank Ergasias

Poor diversification

The 3 months correlation between Intertech and Eurobank is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Intertech SA Inter and Eurobank Ergasias Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and Intertech 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 Intertech SA Inter are associated (or correlated) with Eurobank Ergasias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurobank Ergasias has no effect on the direction of Intertech i.e., Intertech and Eurobank Ergasias go up and down completely randomly.

Pair Corralation between Intertech and Eurobank Ergasias

Assuming the 90 days trading horizon Intertech is expected to generate 1.04 times less return on investment than Eurobank Ergasias. In addition to that, Intertech is 1.41 times more volatile than Eurobank Ergasias Services. It trades about 0.11 of its total potential returns per unit of risk. Eurobank Ergasias Services is currently generating about 0.16 per unit of volatility. If you would invest  226.00  in Eurobank Ergasias Services on December 2, 2024 and sell it today you would earn a total of  24.00  from holding Eurobank Ergasias Services or generate 10.62% return on investment over 90 days.

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

Intertech SA Inter  vs.  Eurobank Ergasias Services

Intertech SA Inter

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intertech SA Inter are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Intertech sustained solid returns over the last few months and may actually be approaching a breakup point.

Eurobank Ergasias

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias Services are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Eurobank Ergasias sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intertech and Eurobank Ergasias

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

The idea behind Intertech SA Inter and Eurobank Ergasias Services 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.