Correlation Between Avax SA and Technical Olympic
Can any of the company-specific risk be diversified away by investing in both Avax SA and Technical Olympic 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 Avax SA and Technical Olympic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avax SA and Technical Olympic SA, you can compare the effects of market volatilities on Avax SA and Technical Olympic 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 Avax SA with a short position of Technical Olympic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avax SA and Technical Olympic.
Diversification Opportunities for Avax SA and Technical Olympic
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Avax and Technical is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Avax SA and Technical Olympic SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technical Olympic and Avax SA 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 Avax SA are associated (or correlated) with Technical Olympic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technical Olympic has no effect on the direction of Avax SA i.e., Avax SA and Technical Olympic go up and down completely randomly.
Pair Corralation between Avax SA and Technical Olympic
Assuming the 90 days trading horizon Avax SA is expected to generate 1.72 times more return on investment than Technical Olympic. However, Avax SA is 1.72 times more volatile than Technical Olympic SA. It trades about 0.06 of its potential returns per unit of risk. Technical Olympic SA is currently generating about -0.06 per unit of risk. If you would invest 141.00 in Avax SA on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Avax SA or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avax SA vs. Technical Olympic SA
Performance |
| Timeline |
| Avax SA |
| Technical Olympic |
Avax SA and Technical Olympic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avax SA and Technical Olympic
The main advantage of trading using opposite Avax SA and Technical Olympic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avax SA position performs unexpectedly, Technical Olympic 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 Technical Olympic will offset losses from the drop in Technical Olympic's long position.The idea behind Avax SA and Technical Olympic SA 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.| Technical Olympic vs. Thrace Plastics Holding | Technical Olympic vs. Logismos Information Systems | Technical Olympic vs. Foodlink AE | Technical Olympic vs. Hellenic Telecommunications Organization |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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