Correlation Between Piraeus Financial and Intertech

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

Diversification Opportunities for Piraeus Financial and Intertech

0.61

Correlation Coefficient

Piraeus Financial  Intertech

Poor diversification

The 3 months correlation between Piraeus and Intertech is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Piraeus Financial Holdings 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 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 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 Piraeus Financial i.e., Piraeus Financial and Intertech go up and down completely randomly.

Pair Corralation between Piraeus Financial and Intertech

Assuming the 90 days trading horizon Piraeus Financial Holdings is expected to generate 0.73 times more return on investment than Intertech. However, Piraeus Financial Holdings is 1.36 times less risky than Intertech. It trades about 0.0 of its potential returns per unit of risk. Intertech SA Inter is currently generating about -0.1 per unit of risk. If you would invest  389.00  in Piraeus Financial Holdings on September 12, 2024 and sell it today you would lose (4.00) from holding Piraeus Financial Holdings or give up 1.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Piraeus Financial Holdings  vs.  Intertech SA Inter

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 somewhat strong basic indicators, Piraeus Financial 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 Piraeus Financial and Intertech

The main advantage of trading using opposite Piraeus Financial and Intertech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piraeus Financial 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 Piraeus Financial Holdings 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.