Correlation Between Piraeus Financial and Piraeus Port

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

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

Diversification Opportunities for Piraeus Financial and Piraeus Port

0.5

Correlation Coefficient

Piraeus Financial  Piraeus Port

Very weak diversification

The 3 months correlation between Piraeus and Piraeus is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Financial Holdings and Piraeus Port Authority in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Port Authority and Piraeus Financial 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 Piraeus Financial Holdings are associated (or correlated) with Piraeus Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Port Authority has no effect on the direction of Piraeus Financial i.e., Piraeus Financial and Piraeus Port go up and down completely randomly.

Pair Corralation between Piraeus Financial and Piraeus Port

Assuming the 90 days trading horizon Piraeus Financial Holdings is expected to generate 1.08 times more return on investment than Piraeus Port. However, Piraeus Financial is 1.08 times more volatile than Piraeus Port Authority. It trades about 0.32 of its potential returns per unit of risk. Piraeus Port Authority is currently generating about 0.17 per unit of risk. If you would invest  385.00  in Piraeus Financial Holdings on December 31, 2024 and sell it today you would earn a total of  155.00  from holding Piraeus Financial Holdings or generate 40.26% return on investment over 90 days.

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

Piraeus Financial Holdings  vs.  Piraeus Port Authority

Piraeus Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Piraeus Financial Holdings are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Piraeus Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Piraeus Port Authority

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Piraeus Port Authority are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Piraeus Port unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Piraeus Financial and Piraeus Port

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

The idea behind Piraeus Financial Holdings and Piraeus Port Authority 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.