Correlation Between Athens General and General Commercial
Can any of the company-specific risk be diversified away by investing in both Athens General and General Commercial 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 General Commercial 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 General Commercial Industrial, you can compare the effects of market volatilities on Athens General and General Commercial 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 General Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athens General and General Commercial.
Diversification Opportunities for Athens General and General Commercial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Athens and General is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Athens General Composite and General Commercial Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Commercial 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 General Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Commercial has no effect on the direction of Athens General i.e., Athens General and General Commercial go up and down completely randomly.
Pair Corralation between Athens General and General Commercial
Assuming the 90 days trading horizon Athens General is expected to generate 1.15 times less return on investment than General Commercial. But when comparing it to its historical volatility, Athens General Composite is 2.06 times less risky than General Commercial. It trades about 0.34 of its potential returns per unit of risk. General Commercial Industrial is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 131.00 in General Commercial Industrial on October 26, 2024 and sell it today you would earn a total of 13.00 from holding General Commercial Industrial or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athens General Composite vs. General Commercial Industrial
Performance |
| Timeline |
Athens General and General Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Athens General Composite
Pair trading matchups for Athens General
General Commercial Industrial
Pair trading matchups for General Commercial
Pair Trading with Athens General and General Commercial
The main advantage of trading using opposite Athens General and General Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athens General position performs unexpectedly, General Commercial 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 General Commercial will offset losses from the drop in General Commercial's long position.| Athens General vs. Hellenic Telecommunications Organization | Athens General vs. Profile Systems Software | Athens General vs. Sidma SA Steel | Athens General vs. Elton International Trading |
| General Commercial vs. Ekter SA | General Commercial vs. Elton International Trading | General Commercial vs. Piraeus Port Authority | General Commercial vs. Hellenic Petroleum SA |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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