Correlation Between Uwharrie Capital and Eurobank Ergasias

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

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

Diversification Opportunities for Uwharrie Capital and Eurobank Ergasias

0.27

Correlation Coefficient

Uwharrie Capital  Eurobank Ergasias

Modest diversification

The 3 months correlation between Uwharrie and Eurobank is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Uwharrie Capital Corp and Eurobank Ergasias SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and Uwharrie Capital 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 Uwharrie Capital Corp 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 Uwharrie Capital i.e., Uwharrie Capital and Eurobank Ergasias go up and down completely randomly.

Pair Corralation between Uwharrie Capital and Eurobank Ergasias

Given the investment horizon of 90 days Uwharrie Capital is expected to generate 1.64 times less return on investment than Eurobank Ergasias. But when comparing it to its historical volatility, Uwharrie Capital Corp is 1.06 times less risky than Eurobank Ergasias. It trades about 0.04 of its potential returns per unit of risk. Eurobank Ergasias SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  67.00  in Eurobank Ergasias SA on October 23, 2024 and sell it today you would earn a total of  53.00  from holding Eurobank Ergasias SA or generate 79.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	69.64%
Values	Daily Returns

Uwharrie Capital Corp  vs.  Eurobank Ergasias SA

Uwharrie Capital Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Uwharrie Capital Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, Uwharrie Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Eurobank Ergasias

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Eurobank Ergasias showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Uwharrie Capital and Eurobank Ergasias

The main advantage of trading using opposite Uwharrie Capital and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uwharrie Capital 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 Uwharrie Capital Corp and Eurobank Ergasias SA 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..