Correlation Between Hellenic Petroleum and Piraeus Port
Can any of the company-specific risk be diversified away by investing in both Hellenic Petroleum and Piraeus Port 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 Piraeus Port 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 Piraeus Port Authority, you can compare the effects of market volatilities on Hellenic Petroleum and Piraeus Port 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 Piraeus Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hellenic Petroleum and Piraeus Port.
Diversification Opportunities for Hellenic Petroleum and Piraeus Port
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hellenic and Piraeus is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Petroleum SA and Piraeus Port Authority in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Port Authority 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 Piraeus Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Port Authority has no effect on the direction of Hellenic Petroleum i.e., Hellenic Petroleum and Piraeus Port go up and down completely randomly.
Pair Corralation between Hellenic Petroleum and Piraeus Port
Assuming the 90 days trading horizon Hellenic Petroleum SA is expected to under-perform the Piraeus Port. But the stock apears to be less risky and, when comparing its historical volatility, Hellenic Petroleum SA is 2.35 times less risky than Piraeus Port. The stock trades about -0.04 of its potential returns per unit of risk. The Piraeus Port Authority is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,005 in Piraeus Port Authority on November 5, 2024 and sell it today you would lose (15.00) from holding Piraeus Port Authority or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hellenic Petroleum SA vs. Piraeus Port Authority
Performance |
| Timeline |
| Hellenic Petroleum |
| Piraeus Port Authority |
Hellenic Petroleum and Piraeus Port Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hellenic Petroleum and Piraeus Port
The main advantage of trading using opposite Hellenic Petroleum and Piraeus Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hellenic Petroleum position performs unexpectedly, Piraeus Port 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 Piraeus Port will offset losses from the drop in Piraeus Port's 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 |
| Piraeus Port vs. Daios Plastics SA | Piraeus Port vs. Performance Technologies SA | Piraeus Port vs. Sidma SA Steel | Piraeus Port 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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