Correlation Between Eurobank Ergasias and US Bancorp
Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias and US Bancorp 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 US Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurobank Ergasias SA and US Bancorp PERP, you can compare the effects of market volatilities on Eurobank Ergasias and US Bancorp 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 US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and US Bancorp.
Diversification Opportunities for Eurobank Ergasias and US Bancorp
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eurobank and USB-PA is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias SA and US Bancorp PERP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp PERP 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 SA are associated (or correlated) with US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp PERP has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and US Bancorp go up and down completely randomly.
Pair Corralation between Eurobank Ergasias and US Bancorp
Assuming the 90 days horizon Eurobank Ergasias SA is expected to generate 1.71 times more return on investment than US Bancorp. However, Eurobank Ergasias is 1.71 times more volatile than US Bancorp PERP. It trades about 0.08 of its potential returns per unit of risk. US Bancorp PERP is currently generating about 0.02 per unit of risk. If you would invest 95.00 in Eurobank Ergasias SA on January 20, 2024 and sell it today you would earn a total of 3.00 from holding Eurobank Ergasias SA or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eurobank Ergasias SA vs. US Bancorp PERP
Performance |
| Timeline |
| Eurobank Ergasias |
| US Bancorp PERP |
Eurobank Ergasias and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurobank Ergasias and US Bancorp
The main advantage of trading using opposite Eurobank Ergasias and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurobank Ergasias position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's long position.| Eurobank Ergasias vs. National Bank of | Eurobank Ergasias vs. Piraeus Financial Holdings | Eurobank Ergasias vs. Piraeus Bank SA | Eurobank Ergasias vs. Alpha Services and |
| US Bancorp vs. KeyCorp | US Bancorp vs. Regions Financial | US Bancorp vs. US Bancorp | US Bancorp vs. KeyCorp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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