Correlation Between Marfin Investment and Optima Bank

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

By analyzing existing cross correlation between Marfin Investment Group and Optima bank SA, you can compare the effects of market volatilities on Marfin Investment and Optima Bank 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 Marfin Investment with a short position of Optima Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfin Investment and Optima Bank.

Diversification Opportunities for Marfin Investment and Optima Bank

0.1

Correlation Coefficient

Marfin Investment  Optima Bank

Average diversification

The 3 months correlation between Marfin and Optima is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Marfin Investment Group and Optima bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optima bank SA and Marfin Investment 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 Marfin Investment Group are associated (or correlated) with Optima Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optima bank SA has no effect on the direction of Marfin Investment i.e., Marfin Investment and Optima Bank go up and down completely randomly.

Pair Corralation between Marfin Investment and Optima Bank

Assuming the 90 days trading horizon Marfin Investment is expected to generate 5.89 times less return on investment than Optima Bank. In addition to that, Marfin Investment is 1.62 times more volatile than Optima bank SA. It trades about 0.02 of its total potential returns per unit of risk. Optima bank SA is currently generating about 0.19 per unit of volatility. If you would invest  1,260  in Optima bank SA on October 26, 2024 and sell it today you would earn a total of  40.00  from holding Optima bank SA or generate 3.17% return on investment over 90 days.

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

Marfin Investment Group  vs.  Optima bank SA

Marfin Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marfin Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Optima bank SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Optima bank SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Optima Bank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Marfin Investment and Optima Bank

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

The idea behind Marfin Investment Group and Optima bank SA 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.