Correlation Between Athens Water and Mytilineos
Can any of the company-specific risk be diversified away by investing in both Athens Water and Mytilineos 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 Mytilineos 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 Mytilineos SA, you can compare the effects of market volatilities on Athens Water and Mytilineos 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 Mytilineos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athens Water and Mytilineos.
Diversification Opportunities for Athens Water and Mytilineos
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Athens and Mytilineos is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Athens Water Supply and Mytilineos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mytilineos 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 Mytilineos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mytilineos SA has no effect on the direction of Athens Water i.e., Athens Water and Mytilineos go up and down completely randomly.
Pair Corralation between Athens Water and Mytilineos
Assuming the 90 days trading horizon Athens Water Supply is expected to generate 0.57 times more return on investment than Mytilineos. However, Athens Water Supply is 1.76 times less risky than Mytilineos. It trades about 0.1 of its potential returns per unit of risk. Mytilineos SA is currently generating about -0.08 per unit of risk. If you would invest 568.00 in Athens Water Supply on August 27, 2024 and sell it today you would earn a total of 10.00 from holding Athens Water Supply or generate 1.76% 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. Mytilineos SA
Performance |
| Timeline |
| Athens Water Supply |
| Mytilineos SA |
Athens Water and Mytilineos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athens Water and Mytilineos
The main advantage of trading using opposite Athens Water and Mytilineos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athens Water position performs unexpectedly, Mytilineos 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 Mytilineos will offset losses from the drop in Mytilineos' long position.| Athens Water vs. Hellenic Petroleum SA | Athens Water vs. Mytilineos SA | Athens Water vs. Hellenic Telecommunications Organization | Athens Water vs. Public Power |
| Mytilineos vs. National Bank of | Mytilineos vs. EL D Mouzakis | Mytilineos vs. Lampsa Hellenic Hotels | Mytilineos vs. Eurobank Ergasias Services |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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