Correlation Between Alpha Trust and Eurobank Ergasias

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

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

Diversification Opportunities for Alpha Trust and Eurobank Ergasias

0.09

Correlation Coefficient

Alpha Trust  Eurobank Ergasias

Significant diversification

The 3 months correlation between Alpha and Eurobank is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Trust Andromeda and Eurobank Ergasias Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and Alpha Trust 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 Alpha Trust Andromeda 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 Alpha Trust i.e., Alpha Trust and Eurobank Ergasias go up and down completely randomly.

Pair Corralation between Alpha Trust and Eurobank Ergasias

Assuming the 90 days trading horizon Alpha Trust is expected to generate 2.35 times less return on investment than Eurobank Ergasias. But when comparing it to its historical volatility, Alpha Trust Andromeda is 1.75 times less risky than Eurobank Ergasias. It trades about 0.08 of its potential returns per unit of risk. Eurobank Ergasias Services is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  192.00  in Eurobank Ergasias Services on February 20, 2024 and sell it today you would earn a total of  19.00  from holding Eurobank Ergasias Services or generate 9.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

Alpha Trust Andromeda  vs.  Eurobank Ergasias Services

Alpha Trust Andromeda

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Trust Andromeda are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Alpha Trust is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Eurobank Ergasias

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias Services are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, Eurobank Ergasias may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Alpha Trust and Eurobank Ergasias

The main advantage of trading using opposite Alpha Trust and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Trust 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 Alpha Trust Andromeda 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.