Correlation Between Piraeus Financial and Elton International

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

Diversification Opportunities for Piraeus Financial and Elton International

-0.44

Correlation Coefficient

Piraeus Financial  Elton International

Very good diversification

The 3 months correlation between Piraeus and Elton is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Financial Holdings and Elton International Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elton International 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 Elton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elton International has no effect on the direction of Piraeus Financial i.e., Piraeus Financial and Elton International go up and down completely randomly.

Pair Corralation between Piraeus Financial and Elton International

Assuming the 90 days trading horizon Piraeus Financial Holdings is expected to under-perform the Elton International. But the stock apears to be less risky and, when comparing its historical volatility, Piraeus Financial Holdings is 1.01 times less risky than Elton International. The stock trades about -0.08 of its potential returns per unit of risk. The Elton International Trading is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  170.00  in Elton International Trading on September 5, 2024 and sell it today you would earn a total of  17.00  from holding Elton International Trading or generate 10.0% return on investment over 90 days.

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

Piraeus Financial Holdings  vs.  Elton International Trading

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 latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Elton International

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elton International Trading are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Elton International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Piraeus Financial and Elton International

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

The idea behind Piraeus Financial Holdings and Elton International Trading 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.