Correlation Between Attica Bank and Eurobank Ergasias

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

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

Diversification Opportunities for Attica Bank and Eurobank Ergasias

0.73

Correlation Coefficient

Attica Bank  Eurobank Ergasias

Poor diversification

The 3 months correlation between Attica and Eurobank is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Attica Bank SA and Eurobank Ergasias Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and Attica 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 Attica Bank SA 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 Attica Bank i.e., Attica Bank and Eurobank Ergasias go up and down completely randomly.

Pair Corralation between Attica Bank and Eurobank Ergasias

Assuming the 90 days trading horizon Attica Bank SA is expected to generate 1.99 times more return on investment than Eurobank Ergasias. However, Attica Bank is 1.99 times more volatile than Eurobank Ergasias Services. It trades about 0.16 of its potential returns per unit of risk. Eurobank Ergasias Services is currently generating about 0.21 per unit of risk. If you would invest  55.00  in Attica Bank SA on December 2, 2024 and sell it today you would earn a total of  16.00  from holding Attica Bank SA or generate 29.09% return on investment over 90 days.

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

Attica Bank SA  vs.  Eurobank Ergasias Services

Attica Bank SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Attica Bank SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Attica Bank unveiled 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 Attica Bank and Eurobank Ergasias

The main advantage of trading using opposite Attica Bank and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Attica Bank 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 Attica Bank SA 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.