Correlation Between Eurobank Ergasias and Intertech

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

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

Diversification Opportunities for Eurobank Ergasias and Intertech

0.11

Correlation Coefficient

Eurobank Ergasias  Intertech

Average diversification

The 3 months correlation between Eurobank and Intertech is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services and Intertech SA Inter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intertech SA Inter and Eurobank Ergasias 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 Eurobank Ergasias Services are associated (or correlated) with Intertech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intertech SA Inter has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and Intertech go up and down completely randomly.

Pair Corralation between Eurobank Ergasias and Intertech

Assuming the 90 days trading horizon Eurobank Ergasias Services is expected to generate 0.68 times more return on investment than Intertech. However, Eurobank Ergasias Services is 1.46 times less risky than Intertech. It trades about 0.05 of its potential returns per unit of risk. Intertech SA Inter is currently generating about -0.11 per unit of risk. If you would invest  206.00  in Eurobank Ergasias Services on September 5, 2024 and sell it today you would earn a total of  9.00  from holding Eurobank Ergasias Services or generate 4.37% return on investment over 90 days.

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

Eurobank Ergasias Services  vs.  Intertech SA Inter

Eurobank Ergasias

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias Services are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Eurobank Ergasias is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Intertech SA Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intertech SA Inter 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 basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Eurobank Ergasias and Intertech

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

The idea behind Eurobank Ergasias Services and Intertech SA Inter 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.