Correlation Between General Commercial and Athens General
Can any of the company-specific risk be diversified away by investing in both General Commercial and Athens General 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 General Commercial and Athens General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Commercial Industrial and Athens General Composite, you can compare the effects of market volatilities on General Commercial and Athens General 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 General Commercial with a short position of Athens General. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Commercial and Athens General.
Diversification Opportunities for General Commercial and Athens General
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between General and Athens is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding General Commercial Industrial and Athens General Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athens General Composite and General Commercial 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 General Commercial Industrial are associated (or correlated) with Athens General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athens General Composite has no effect on the direction of General Commercial i.e., General Commercial and Athens General go up and down completely randomly.
Pair Corralation between General Commercial and Athens General
Assuming the 90 days trading horizon General Commercial Industrial is expected to under-perform the Athens General. In addition to that, General Commercial is 2.3 times more volatile than Athens General Composite. It trades about -0.05 of its total potential returns per unit of risk. Athens General Composite is currently generating about -0.01 per unit of volatility. If you would invest 144,374 in Athens General Composite on September 3, 2024 and sell it today you would lose (1,941) from holding Athens General Composite or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Commercial Industrial vs. Athens General Composite
Performance |
| Timeline |
General Commercial and Athens General Volatility Contrast
Predicted Return Density |
| Returns |
General Commercial Industrial
Pair trading matchups for General Commercial
Athens General Composite
Pair trading matchups for Athens General
Pair Trading with General Commercial and Athens General
The main advantage of trading using opposite General Commercial and Athens General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Commercial position performs unexpectedly, Athens General 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 General will offset losses from the drop in Athens General's long position.| General Commercial vs. Ekter SA | General Commercial vs. Elton International Trading | General Commercial vs. Piraeus Port Authority | General Commercial vs. Hellenic Petroleum SA |
| Athens General vs. Logismos Information Systems | Athens General vs. Elton International Trading | Athens General vs. Karelia Tobacco | Athens General 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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