Correlation Between Performance Technologies and Piraeus Financial

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

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

Diversification Opportunities for Performance Technologies and Piraeus Financial

0.46

Correlation Coefficient

Performance Technologies  Piraeus Financial

Very weak diversification

The 3 months correlation between Performance and Piraeus is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Performance Technologies SA and Piraeus Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Financial and Performance Technologies 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 Performance Technologies SA are associated (or correlated) with Piraeus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Financial has no effect on the direction of Performance Technologies i.e., Performance Technologies and Piraeus Financial go up and down completely randomly.

Pair Corralation between Performance Technologies and Piraeus Financial

Assuming the 90 days trading horizon Performance Technologies SA is expected to under-perform the Piraeus Financial. In addition to that, Performance Technologies is 1.29 times more volatile than Piraeus Financial Holdings. It trades about -0.15 of its total potential returns per unit of risk. Piraeus Financial Holdings is currently generating about 0.02 per unit of volatility. If you would invest  385.00  in Piraeus Financial Holdings on September 14, 2024 and sell it today you would earn a total of  6.00  from holding Piraeus Financial Holdings or generate 1.56% return on investment over 90 days.

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

Performance Technologies SA  vs.  Piraeus Financial Holdings

Performance Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Performance Technologies SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Piraeus Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Piraeus Financial Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Piraeus Financial is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Performance Technologies and Piraeus Financial

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

The idea behind Performance Technologies SA and Piraeus Financial Holdings 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.