Correlation Between Elvalhalcor Hellenic and Eurobank Ergasias

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

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

Diversification Opportunities for Elvalhalcor Hellenic and Eurobank Ergasias

0.64

Correlation Coefficient

Elvalhalcor Hellenic  Eurobank Ergasias

Poor diversification

The 3 months correlation between Elvalhalcor and Eurobank is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Elvalhalcor Hellenic Copper and Eurobank Ergasias Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and Elvalhalcor Hellenic 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 Elvalhalcor Hellenic Copper 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 Elvalhalcor Hellenic i.e., Elvalhalcor Hellenic and Eurobank Ergasias go up and down completely randomly.

Pair Corralation between Elvalhalcor Hellenic and Eurobank Ergasias

Assuming the 90 days trading horizon Elvalhalcor Hellenic is expected to generate 1.86 times less return on investment than Eurobank Ergasias. In addition to that, Elvalhalcor Hellenic is 1.18 times more volatile than Eurobank Ergasias Services. It trades about 0.05 of its total potential returns per unit of risk. Eurobank Ergasias Services is currently generating about 0.12 per unit of volatility. If you would invest  198.00  in Eurobank Ergasias Services on September 15, 2024 and sell it today you would earn a total of  23.00  from holding Eurobank Ergasias Services or generate 11.62% return on investment over 90 days.

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

Elvalhalcor Hellenic Copper  vs.  Eurobank Ergasias Services

Elvalhalcor Hellenic

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Elvalhalcor Hellenic Copper are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Elvalhalcor Hellenic is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Eurobank Ergasias

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias Services are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Eurobank Ergasias may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Elvalhalcor Hellenic and Eurobank Ergasias

The main advantage of trading using opposite Elvalhalcor Hellenic and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elvalhalcor Hellenic 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 Elvalhalcor Hellenic Copper and Eurobank Ergasias Services 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.