Correlation Between Eurobank Ergasias and Motor Oil

Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias and Motor Oil 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 Motor Oil 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 Motor Oil Corinth, you can compare the effects of market volatilities on Eurobank Ergasias and Motor Oil 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 Motor Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and Motor Oil.

Diversification Opportunities for Eurobank Ergasias and Motor Oil

0.45

Correlation Coefficient

Eurobank Ergasias  Motor Oil

Very weak diversification

The 3 months correlation between Eurobank and Motor is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services and Motor Oil Corinth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motor Oil Corinth 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 Motor Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motor Oil Corinth has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and Motor Oil go up and down completely randomly.

Pair Corralation between Eurobank Ergasias and Motor Oil

Assuming the 90 days trading horizon Eurobank Ergasias Services is expected to generate 1.17 times more return on investment than Motor Oil. However, Eurobank Ergasias is 1.17 times more volatile than Motor Oil Corinth. It trades about 0.29 of its potential returns per unit of risk. Motor Oil Corinth is currently generating about 0.06 per unit of risk. If you would invest  177.00  in Eurobank Ergasias Services on February 28, 2024 and sell it today you would earn a total of  35.00  from holding Eurobank Ergasias Services or generate 19.77% return on investment over 90 days.

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

Eurobank Ergasias Services  vs.  Motor Oil Corinth

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.

Motor Oil Corinth

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Motor Oil Corinth are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical indicators, Motor Oil may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Eurobank Ergasias and Motor Oil

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

The idea behind Eurobank Ergasias Services and Motor Oil Corinth 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.