Correlation Between Eurobank Ergasias and N Leventeris

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

Diversification Opportunities for Eurobank Ergasias and N Leventeris

-0.27

Correlation Coefficient

Eurobank Ergasias  N Leventeris

Very good diversification

The 3 months correlation between Eurobank and LEBEP is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services and N Leventeris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Leventeris SA 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 N Leventeris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Leventeris SA has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and N Leventeris go up and down completely randomly.

Pair Corralation between Eurobank Ergasias and N Leventeris

Assuming the 90 days trading horizon Eurobank Ergasias Services is expected to under-perform the N Leventeris. But the stock apears to be less risky and, when comparing its historical volatility, Eurobank Ergasias Services is 4.63 times less risky than N Leventeris. The stock trades about -0.04 of its potential returns per unit of risk. The N Leventeris SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  26.00  in N Leventeris SA on August 23, 2024 and sell it today you would earn a total of  8.00  from holding N Leventeris SA or generate 30.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Eurobank Ergasias Services  vs.  N Leventeris SA

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 somewhat strong basic indicators, Eurobank Ergasias is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

N Leventeris SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in N Leventeris SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, N Leventeris sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eurobank Ergasias and N Leventeris

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

The idea behind Eurobank Ergasias Services and N Leventeris SA 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.