Correlation Between Bank of Greece and CPI Computer

Can any of the company-specific risk be diversified away by investing in both Bank of Greece and CPI Computer 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 CPI Computer 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 CPI Computer Peripherals, you can compare the effects of market volatilities on Bank of Greece and CPI Computer 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 CPI Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Greece and CPI Computer.

Diversification Opportunities for Bank of Greece and CPI Computer

0.61

Correlation Coefficient

Bank of Greece  CPI Computer

Poor diversification

The 3 months correlation between Bank and CPI is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Greece and CPI Computer Peripherals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPI Computer Peripherals 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 CPI Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPI Computer Peripherals has no effect on the direction of Bank of Greece i.e., Bank of Greece and CPI Computer go up and down completely randomly.

Pair Corralation between Bank of Greece and CPI Computer

Assuming the 90 days trading horizon Bank of Greece is expected to generate 0.37 times more return on investment than CPI Computer. However, Bank of Greece is 2.69 times less risky than CPI Computer. It trades about -0.05 of its potential returns per unit of risk. CPI Computer Peripherals is currently generating about -0.15 per unit of risk. If you would invest  1,360  in Bank of Greece on September 4, 2024 and sell it today you would lose (40.00) from holding Bank of Greece or give up 2.94% of portfolio value over 90 days.

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

Bank of Greece  vs.  CPI Computer Peripherals

Bank of Greece

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank of Greece has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bank of Greece is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

CPI Computer Peripherals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bank of Greece and CPI Computer

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

The idea behind Bank of Greece and CPI Computer Peripherals 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.