Correlation Between Eurobank Ergasias and Genfit

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

Diversification Opportunities for Eurobank Ergasias and Genfit

-0.24

Correlation Coefficient

Eurobank Ergasias  Genfit

Very good diversification

The 3 months correlation between Eurobank and Genfit is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit 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 Genfit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and Genfit go up and down completely randomly.

Pair Corralation between Eurobank Ergasias and Genfit

Assuming the 90 days horizon Eurobank Ergasias Services is expected to under-perform the Genfit. But the pink sheet apears to be less risky and, when comparing its historical volatility, Eurobank Ergasias Services is 8.22 times less risky than Genfit. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Genfit is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  484.00  in Genfit on July 22, 2024 and sell it today you would earn a total of  110.00  from holding Genfit or generate 22.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Eurobank Ergasias Services  vs.  Genfit

Eurobank Ergasias

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eurobank Ergasias Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Eurobank Ergasias is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Genfit

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genfit are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Genfit unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eurobank Ergasias and Genfit

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

The idea behind Eurobank Ergasias Services and Genfit 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.