Correlation Between Athens Water and Ilyda SA
Can any of the company-specific risk be diversified away by investing in both Athens Water and Ilyda SA 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 Ilyda SA 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 Ilyda SA, you can compare the effects of market volatilities on Athens Water and Ilyda SA 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 Ilyda SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athens Water and Ilyda SA.
Diversification Opportunities for Athens Water and Ilyda SA
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Athens and Ilyda is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Athens Water Supply and Ilyda SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilyda SA 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 Ilyda SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilyda SA has no effect on the direction of Athens Water i.e., Athens Water and Ilyda SA go up and down completely randomly.
Pair Corralation between Athens Water and Ilyda SA
Assuming the 90 days trading horizon Athens Water Supply is expected to under-perform the Ilyda SA. But the stock apears to be less risky and, when comparing its historical volatility, Athens Water Supply is 1.96 times less risky than Ilyda SA. The stock trades about -0.03 of its potential returns per unit of risk. The Ilyda SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 117.00 in Ilyda SA on August 27, 2024 and sell it today you would earn a total of 57.00 from holding Ilyda SA or generate 48.72% 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. Ilyda SA
Performance |
| Timeline |
| Athens Water Supply |
| Ilyda SA |
Athens Water and Ilyda SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athens Water and Ilyda SA
The main advantage of trading using opposite Athens Water and Ilyda SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athens Water position performs unexpectedly, Ilyda SA 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 Ilyda SA will offset losses from the drop in Ilyda SA'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 |
| Ilyda SA vs. Athens Water Supply | Ilyda SA vs. Intracom Holdings SA | Ilyda SA vs. Admie Holding SA | Ilyda SA vs. Hellenic Petroleum SA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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