Correlation Between National Bank and Piraeus Financial

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

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

Diversification Opportunities for National Bank and Piraeus Financial

0.0

Correlation Coefficient

National Bank  Piraeus Financial

Pay attention - limited upside

The 3 months correlation between National and Piraeus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Piraeus Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Financial and National Bank 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 National Bank of are associated (or correlated) with Piraeus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Financial has no effect on the direction of National Bank i.e., National Bank and Piraeus Financial go up and down completely randomly.

Pair Corralation between National Bank and Piraeus Financial

If you would invest  792.00  in National Bank of on December 30, 2024 and sell it today you would earn a total of  273.00  from holding National Bank of or generate 34.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

National Bank of  vs.  Piraeus Financial Holdings

National Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in National Bank of are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, National Bank reported solid returns over the last few months and may actually be approaching a breakup point.

Piraeus Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Piraeus Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Piraeus Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with National Bank and Piraeus Financial

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

The idea behind National Bank of and Piraeus Financial Holdings 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.