Correlation Between Middlebury National and Eurobank Ergasias

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

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

Diversification Opportunities for Middlebury National and Eurobank Ergasias

0.32

Correlation Coefficient

Middlebury National  Eurobank Ergasias

Weak diversification

The 3 months correlation between Middlebury and Eurobank is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Middlebury National and Eurobank Ergasias Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and Middlebury National 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 Middlebury National 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 Middlebury National i.e., Middlebury National and Eurobank Ergasias go up and down completely randomly.

Pair Corralation between Middlebury National and Eurobank Ergasias

Given the investment horizon of 90 days Middlebury National is expected to generate 38.56 times less return on investment than Eurobank Ergasias. But when comparing it to its historical volatility, Middlebury National is 1.0 times less risky than Eurobank Ergasias. It trades about 0.01 of its potential returns per unit of risk. Eurobank Ergasias Services is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  209.00  in Eurobank Ergasias Services on October 26, 2024 and sell it today you would earn a total of  30.00  from holding Eurobank Ergasias Services or generate 14.35% return on investment over 90 days.

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

Middlebury National  vs.  Eurobank Ergasias Services

Middlebury National

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Middlebury National are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Middlebury National unveiled solid returns over the last few months and may actually be approaching a breakup point.

Eurobank Ergasias

Risk-Adjusted Performance

10 of 100

OK

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 nearly unfluctuating technical and fundamental indicators, Eurobank Ergasias may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Middlebury National and Eurobank Ergasias

The main advantage of trading using opposite Middlebury National and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Middlebury National 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 Middlebury National 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.