Correlation Between Admie Holding and Athens Water
Can any of the company-specific risk be diversified away by investing in both Admie Holding and Athens Water 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 Admie Holding and Athens Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Admie Holding SA and Athens Water Supply, you can compare the effects of market volatilities on Admie Holding and Athens Water 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 Admie Holding with a short position of Athens Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Admie Holding and Athens Water.
Diversification Opportunities for Admie Holding and Athens Water
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Admie and Athens is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Admie Holding SA and Athens Water Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athens Water Supply and Admie Holding 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 Admie Holding SA are associated (or correlated) with Athens Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athens Water Supply has no effect on the direction of Admie Holding i.e., Admie Holding and Athens Water go up and down completely randomly.
Pair Corralation between Admie Holding and Athens Water
Assuming the 90 days trading horizon Admie Holding SA is expected to generate 1.12 times more return on investment than Athens Water. However, Admie Holding is 1.12 times more volatile than Athens Water Supply. It trades about 0.06 of its potential returns per unit of risk. Athens Water Supply is currently generating about -0.02 per unit of risk. If you would invest 159.00 in Admie Holding SA on August 28, 2024 and sell it today you would earn a total of 78.00 from holding Admie Holding SA or generate 49.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Admie Holding SA vs. Athens Water Supply
Performance |
| Timeline |
| Admie Holding SA |
| Athens Water Supply |
Admie Holding and Athens Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Admie Holding and Athens Water
The main advantage of trading using opposite Admie Holding and Athens Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Admie Holding position performs unexpectedly, Athens Water 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 Athens Water will offset losses from the drop in Athens Water's long position.| Admie Holding vs. Mytilineos SA | Admie Holding vs. Motor Oil Corinth | Admie Holding vs. Hellenic Petroleum SA | Admie Holding vs. National Bank of |
| Athens Water vs. Hellenic Petroleum SA | Athens Water vs. Mytilineos SA | Athens Water vs. Hellenic Telecommunications Organization | Athens Water vs. Public Power |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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