Correlation Between Athens Water and Thessaloniki Water
Can any of the company-specific risk be diversified away by investing in both Athens Water and Thessaloniki Water 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 Athens Water and Thessaloniki Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athens Water Supply and Thessaloniki Water Supply, you can compare the effects of market volatilities on Athens Water and Thessaloniki Water 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 Athens Water with a short position of Thessaloniki Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athens Water and Thessaloniki Water.
Diversification Opportunities for Athens Water and Thessaloniki Water
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Athens and Thessaloniki is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Athens Water Supply and Thessaloniki Water Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thessaloniki Water Supply and Athens Water 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 Athens Water Supply are associated (or correlated) with Thessaloniki Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thessaloniki Water Supply has no effect on the direction of Athens Water i.e., Athens Water and Thessaloniki Water go up and down completely randomly.
Pair Corralation between Athens Water and Thessaloniki Water
Assuming the 90 days trading horizon Athens Water Supply is expected to generate 0.69 times more return on investment than Thessaloniki Water. However, Athens Water Supply is 1.46 times less risky than Thessaloniki Water. It trades about 0.09 of its potential returns per unit of risk. Thessaloniki Water Supply is currently generating about -0.13 per unit of risk. If you would invest 577.00 in Athens Water Supply on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Athens Water Supply or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athens Water Supply vs. Thessaloniki Water Supply
Performance |
| Timeline |
| Athens Water Supply |
| Thessaloniki Water Supply |
Athens Water and Thessaloniki Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athens Water and Thessaloniki Water
The main advantage of trading using opposite Athens Water and Thessaloniki Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athens Water position performs unexpectedly, Thessaloniki Water 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 Thessaloniki Water will offset losses from the drop in Thessaloniki Water's long position.| Athens Water vs. Hellenic Petroleum SA | Athens Water vs. Mytilineos SA | Athens Water vs. Hellenic Telecommunications Organization | Athens Water vs. Public Power |
| Thessaloniki Water vs. Athens Water Supply | Thessaloniki Water vs. Piraeus Port Authority | Thessaloniki Water vs. Hellenic Exchanges | Thessaloniki Water 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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