Correlation Between EL D and Bank of Greece

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

By analyzing existing cross correlation between EL D Mouzakis and Bank of Greece, you can compare the effects of market volatilities on EL D and Bank of Greece 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 EL D with a short position of Bank of Greece. Check out your portfolio center. Please also check ongoing floating volatility patterns of EL D and Bank of Greece.

Diversification Opportunities for EL D and Bank of Greece

0.17

Correlation Coefficient

EL D  Bank of Greece

Average diversification

The 3 months correlation between MOYZK and Bank is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding EL D Mouzakis and Bank of Greece in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Greece and EL D 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 EL D Mouzakis are associated (or correlated) with Bank of Greece. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Greece has no effect on the direction of EL D i.e., EL D and Bank of Greece go up and down completely randomly.

Pair Corralation between EL D and Bank of Greece

Assuming the 90 days trading horizon EL D Mouzakis is expected to generate 2.21 times more return on investment than Bank of Greece. However, EL D is 2.21 times more volatile than Bank of Greece. It trades about 0.0 of its potential returns per unit of risk. Bank of Greece is currently generating about -0.02 per unit of risk. If you would invest  77.00  in EL D Mouzakis on November 19, 2024 and sell it today you would lose (14.00) from holding EL D Mouzakis or give up 18.18% of portfolio value over 90 days.

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

EL D Mouzakis  vs.  Bank of Greece

EL D Mouzakis

Risk-Adjusted Performance

Very Weak

Over the last 90 days EL D Mouzakis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, EL D is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bank of Greece

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Greece are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Bank of Greece may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with EL D and Bank of Greece

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

The idea behind EL D Mouzakis and Bank of Greece 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..