Correlation Between Hellenic Petroleum and Daios Plastics
Can any of the company-specific risk be diversified away by investing in both Hellenic Petroleum and Daios Plastics 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 Hellenic Petroleum and Daios Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hellenic Petroleum SA and Daios Plastics SA, you can compare the effects of market volatilities on Hellenic Petroleum and Daios Plastics 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 Hellenic Petroleum with a short position of Daios Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hellenic Petroleum and Daios Plastics.
Diversification Opportunities for Hellenic Petroleum and Daios Plastics
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hellenic and Daios is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Petroleum SA and Daios Plastics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daios Plastics SA and Hellenic Petroleum 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 Hellenic Petroleum SA are associated (or correlated) with Daios Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daios Plastics SA has no effect on the direction of Hellenic Petroleum i.e., Hellenic Petroleum and Daios Plastics go up and down completely randomly.
Pair Corralation between Hellenic Petroleum and Daios Plastics
Assuming the 90 days trading horizon Hellenic Petroleum SA is expected to under-perform the Daios Plastics. But the stock apears to be less risky and, when comparing its historical volatility, Hellenic Petroleum SA is 2.97 times less risky than Daios Plastics. The stock trades about -0.06 of its potential returns per unit of risk. The Daios Plastics SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 350.00 in Daios Plastics SA on August 28, 2024 and sell it today you would earn a total of 10.00 from holding Daios Plastics SA or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hellenic Petroleum SA vs. Daios Plastics SA
Performance |
| Timeline |
| Hellenic Petroleum |
| Daios Plastics SA |
Hellenic Petroleum and Daios Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hellenic Petroleum and Daios Plastics
The main advantage of trading using opposite Hellenic Petroleum and Daios Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hellenic Petroleum position performs unexpectedly, Daios Plastics 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 Daios Plastics will offset losses from the drop in Daios Plastics' long position.| Hellenic Petroleum vs. Motor Oil Corinth | Hellenic Petroleum vs. Greek Organization of | Hellenic Petroleum vs. Mytilineos SA | Hellenic Petroleum vs. Hellenic Telecommunications Organization |
| Daios Plastics vs. Ktima Kostas Lazaridis | Daios Plastics vs. Centric Holdings SA | Daios Plastics vs. Trastor Real Estate | Daios Plastics vs. As Commercial Industrial |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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