Correlation Between Bank of Greece and Alumil Aluminium
Can any of the company-specific risk be diversified away by investing in both Bank of Greece and Alumil Aluminium 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 Bank of Greece and Alumil Aluminium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Greece and Alumil Aluminium Industry, you can compare the effects of market volatilities on Bank of Greece and Alumil Aluminium 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 Bank of Greece with a short position of Alumil Aluminium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Greece and Alumil Aluminium.
Diversification Opportunities for Bank of Greece and Alumil Aluminium
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Alumil is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Greece and Alumil Aluminium Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumil Aluminium Industry and Bank of Greece 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 Bank of Greece are associated (or correlated) with Alumil Aluminium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumil Aluminium Industry has no effect on the direction of Bank of Greece i.e., Bank of Greece and Alumil Aluminium go up and down completely randomly.
Pair Corralation between Bank of Greece and Alumil Aluminium
Assuming the 90 days trading horizon Bank of Greece is expected to under-perform the Alumil Aluminium. But the stock apears to be less risky and, when comparing its historical volatility, Bank of Greece is 1.7 times less risky than Alumil Aluminium. The stock trades about -0.29 of its potential returns per unit of risk. The Alumil Aluminium Industry is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 261.00 in Alumil Aluminium Industry on February 6, 2024 and sell it today you would earn a total of 19.00 from holding Alumil Aluminium Industry or generate 7.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank of Greece vs. Alumil Aluminium Industry
Performance |
Timeline |
Bank of Greece |
Alumil Aluminium Industry |
Bank of Greece and Alumil Aluminium Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of Greece and Alumil Aluminium
The main advantage of trading using opposite Bank of Greece and Alumil Aluminium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Greece position performs unexpectedly, Alumil Aluminium 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 Alumil Aluminium will offset losses from the drop in Alumil Aluminium's long position.Bank of Greece vs. Interlife General Insurance | Bank of Greece vs. Foodlink AE | Bank of Greece vs. General Commercial Industrial | Bank of Greece vs. Elton International Trading |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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