Correlation Between Bank of Greece and Alpha Trust

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

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

Diversification Opportunities for Bank of Greece and Alpha Trust

0.11

Correlation Coefficient

Bank of Greece  Alpha Trust

Average diversification

The 3 months correlation between Bank and Alpha is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Greece and Alpha Trust Mutual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Trust Mutual and Bank of Greece 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 Bank of Greece are associated (or correlated) with Alpha Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Trust Mutual has no effect on the direction of Bank of Greece i.e., Bank of Greece and Alpha Trust go up and down completely randomly.

Pair Corralation between Bank of Greece and Alpha Trust

Assuming the 90 days trading horizon Bank of Greece is expected to generate 3.25 times more return on investment than Alpha Trust. However, Bank of Greece is 3.25 times more volatile than Alpha Trust Mutual. It trades about 0.17 of its potential returns per unit of risk. Alpha Trust Mutual is currently generating about 0.04 per unit of risk. If you would invest  1,320  in Bank of Greece on December 2, 2024 and sell it today you would earn a total of  145.00  from holding Bank of Greece or generate 10.98% return on investment over 90 days.

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

Bank of Greece  vs.  Alpha Trust Mutual

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 April 2025.

Alpha Trust Mutual

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Trust Mutual are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Alpha Trust is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bank of Greece and Alpha Trust

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

The idea behind Bank of Greece and Alpha Trust Mutual 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.