Correlation Between Selected Textiles and Lampsa Hellenic
Can any of the company-specific risk be diversified away by investing in both Selected Textiles and Lampsa Hellenic 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 Selected Textiles and Lampsa Hellenic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selected Textiles SA and Lampsa Hellenic Hotels, you can compare the effects of market volatilities on Selected Textiles and Lampsa Hellenic 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 Selected Textiles with a short position of Lampsa Hellenic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selected Textiles and Lampsa Hellenic.
Diversification Opportunities for Selected Textiles and Lampsa Hellenic
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Selected and Lampsa is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Selected Textiles SA and Lampsa Hellenic Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lampsa Hellenic Hotels and Selected Textiles 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 Selected Textiles SA are associated (or correlated) with Lampsa Hellenic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lampsa Hellenic Hotels has no effect on the direction of Selected Textiles i.e., Selected Textiles and Lampsa Hellenic go up and down completely randomly.
Pair Corralation between Selected Textiles and Lampsa Hellenic
Assuming the 90 days trading horizon Selected Textiles SA is expected to generate 23.8 times more return on investment than Lampsa Hellenic. However, Selected Textiles is 23.8 times more volatile than Lampsa Hellenic Hotels. It trades about 0.38 of its potential returns per unit of risk. Lampsa Hellenic Hotels is currently generating about 0.18 per unit of risk. If you would invest 11.00 in Selected Textiles SA on August 24, 2024 and sell it today you would earn a total of 2.00 from holding Selected Textiles SA or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 33.33% |
| Values | Daily Returns |
Selected Textiles SA vs. Lampsa Hellenic Hotels
Performance |
| Timeline |
| Selected Textiles |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Lampsa Hellenic Hotels |
Selected Textiles and Lampsa Hellenic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selected Textiles and Lampsa Hellenic
The main advantage of trading using opposite Selected Textiles and Lampsa Hellenic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selected Textiles position performs unexpectedly, Lampsa Hellenic 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 Lampsa Hellenic will offset losses from the drop in Lampsa Hellenic's long position.| Selected Textiles vs. Technical Olympic SA | Selected Textiles vs. Iktinos Hellas SA | Selected Textiles vs. GEK TERNA Holdings | Selected Textiles vs. Fourlis Holdings SA |
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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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