Correlation Between Bank of Greece and Profile Systems

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

Diversification Opportunities for Bank of Greece and Profile Systems

0.66

Correlation Coefficient

Bank of Greece  Profile Systems

Poor diversification

The 3 months correlation between Bank and Profile is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Greece and Profile Systems Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profile Systems Software 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 Profile Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profile Systems Software has no effect on the direction of Bank of Greece i.e., Bank of Greece and Profile Systems go up and down completely randomly.

Pair Corralation between Bank of Greece and Profile Systems

Assuming the 90 days trading horizon Bank of Greece is expected to generate 6.87 times less return on investment than Profile Systems. But when comparing it to its historical volatility, Bank of Greece is 1.71 times less risky than Profile Systems. It trades about 0.09 of its potential returns per unit of risk. Profile Systems Software is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  534.00  in Profile Systems Software on April 23, 2025 and sell it today you would earn a total of  224.00  from holding Profile Systems Software or generate 41.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Bank of Greece  vs.  Profile Systems Software

Bank of Greece

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Greece are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bank of Greece is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Profile Systems Software

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Profile Systems Software are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Profile Systems unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank of Greece and Profile Systems

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

The idea behind Bank of Greece and Profile Systems Software 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.