Correlation Between Hellenic Exchanges and Athens Medical
Can any of the company-specific risk be diversified away by investing in both Hellenic Exchanges and Athens Medical 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 Exchanges and Athens Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hellenic Exchanges and Athens Medical CSA, you can compare the effects of market volatilities on Hellenic Exchanges and Athens Medical 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 Exchanges with a short position of Athens Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hellenic Exchanges and Athens Medical.
Diversification Opportunities for Hellenic Exchanges and Athens Medical
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hellenic and Athens is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Exchanges and Athens Medical CSA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athens Medical CSA and Hellenic Exchanges 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 Exchanges are associated (or correlated) with Athens Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athens Medical CSA has no effect on the direction of Hellenic Exchanges i.e., Hellenic Exchanges and Athens Medical go up and down completely randomly.
Pair Corralation between Hellenic Exchanges and Athens Medical
Assuming the 90 days trading horizon Hellenic Exchanges is expected to generate 0.91 times more return on investment than Athens Medical. However, Hellenic Exchanges is 1.1 times less risky than Athens Medical. It trades about 0.04 of its potential returns per unit of risk. Athens Medical CSA is currently generating about 0.01 per unit of risk. If you would invest 382.00 in Hellenic Exchanges on October 25, 2024 and sell it today you would earn a total of 103.00 from holding Hellenic Exchanges or generate 26.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hellenic Exchanges vs. Athens Medical CSA
Performance |
| Timeline |
| Hellenic Exchanges |
| Athens Medical CSA |
Hellenic Exchanges and Athens Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hellenic Exchanges and Athens Medical
The main advantage of trading using opposite Hellenic Exchanges and Athens Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hellenic Exchanges position performs unexpectedly, Athens Medical 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 Athens Medical will offset losses from the drop in Athens Medical's long position.| Hellenic Exchanges vs. Greek Organization of | Hellenic Exchanges vs. Mytilineos SA | Hellenic Exchanges vs. Hellenic Telecommunications Organization | Hellenic Exchanges vs. Hellenic Petroleum SA |
| Athens Medical vs. Hellenic Exchanges | Athens Medical vs. Hellenic Telecommunications Organization | Athens Medical vs. GEK TERNA Holdings | Athens Medical vs. Piraeus Port Authority |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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