Correlation Between Piraeus Financial and National Bank

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

Diversification Opportunities for Piraeus Financial and National Bank

-0.38

Correlation Coefficient

Piraeus Financial  National Bank

Very good diversification

The 3 months correlation between Piraeus and National is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Financial Holdings and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Piraeus Financial i.e., Piraeus Financial and National Bank go up and down completely randomly.

Pair Corralation between Piraeus Financial and National Bank

If you would invest  379.00  in Piraeus Financial Holdings on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Piraeus Financial Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Piraeus Financial Holdings  vs.  National Bank of

Piraeus Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Piraeus Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Piraeus Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

National Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Piraeus Financial and National Bank

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

The idea behind Piraeus Financial Holdings and National Bank of 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.