Correlation Between Athens General and Mevaco SA
Can any of the company-specific risk be diversified away by investing in both Athens General and Mevaco SA 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 Mevaco SA 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 Mevaco SA, you can compare the effects of market volatilities on Athens General and Mevaco SA 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 Mevaco SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athens General and Mevaco SA.
Diversification Opportunities for Athens General and Mevaco SA
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Athens and Mevaco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Athens General Composite and Mevaco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mevaco SA 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 Mevaco SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mevaco SA has no effect on the direction of Athens General i.e., Athens General and Mevaco SA go up and down completely randomly.
Pair Corralation between Athens General and Mevaco SA
Assuming the 90 days trading horizon Athens General Composite is expected to generate 0.53 times more return on investment than Mevaco SA. However, Athens General Composite is 1.89 times less risky than Mevaco SA. It trades about 0.05 of its potential returns per unit of risk. Mevaco SA is currently generating about -0.01 per unit of risk. If you would invest 127,550 in Athens General Composite on September 4, 2024 and sell it today you would earn a total of 14,883 from holding Athens General Composite or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Athens General Composite vs. Mevaco SA
Performance |
| Timeline |
Athens General and Mevaco SA Volatility Contrast
Predicted Return Density |
| Returns |
Athens General Composite
Pair trading matchups for Athens General
Mevaco SA
Pair trading matchups for Mevaco SA
Pair Trading with Athens General and Mevaco SA
The main advantage of trading using opposite Athens General and Mevaco SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athens General position performs unexpectedly, Mevaco SA 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 Mevaco SA will offset losses from the drop in Mevaco SA'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 |
| Mevaco SA vs. As Commercial Industrial | Mevaco SA vs. BriQ Properties Real | Mevaco SA vs. Centric Holdings SA | Mevaco SA vs. Ekter 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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