Correlation Between Athens General and Thessaloniki Water
Can any of the company-specific risk be diversified away by investing in both Athens General and Thessaloniki 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 Athens General and Thessaloniki Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athens General Composite and Thessaloniki Water Supply, you can compare the effects of market volatilities on Athens General and Thessaloniki 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 Athens General with a short position of Thessaloniki Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athens General and Thessaloniki Water.
Diversification Opportunities for Athens General and Thessaloniki Water
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Athens and Thessaloniki is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Athens General Composite and Thessaloniki Water Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thessaloniki Water Supply and Athens General 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 Athens General Composite are associated (or correlated) with Thessaloniki Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thessaloniki Water Supply has no effect on the direction of Athens General i.e., Athens General and Thessaloniki Water go up and down completely randomly.
Pair Corralation between Athens General and Thessaloniki Water
Assuming the 90 days trading horizon Athens General Composite is expected to generate 0.77 times more return on investment than Thessaloniki Water. However, Athens General Composite is 1.3 times less risky than Thessaloniki Water. It trades about 0.09 of its potential returns per unit of risk. Thessaloniki Water Supply is currently generating about -0.01 per unit of risk. If you would invest 92,363 in Athens General Composite on September 4, 2024 and sell it today you would earn a total of 50,070 from holding Athens General Composite or generate 54.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athens General Composite vs. Thessaloniki Water Supply
Performance |
| Timeline |
Athens General and Thessaloniki Water Volatility Contrast
Predicted Return Density |
| Returns |
Athens General Composite
Pair trading matchups for Athens General
Thessaloniki Water Supply
Pair trading matchups for Thessaloniki Water
Pair Trading with Athens General and Thessaloniki Water
The main advantage of trading using opposite Athens General and Thessaloniki Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athens General position performs unexpectedly, Thessaloniki 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 Thessaloniki Water will offset losses from the drop in Thessaloniki Water's long position.| Athens General vs. National Bank of | Athens General vs. Technical Olympic SA | Athens General vs. Profile Systems Software | Athens General vs. Bank of Greece |
| Thessaloniki Water vs. Hellenic Petroleum SA | Thessaloniki Water vs. Mytilineos SA | Thessaloniki Water vs. Hellenic Telecommunications Organization | Thessaloniki 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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