Correlation Between General Commercial and Technical Olympic
Can any of the company-specific risk be diversified away by investing in both General Commercial and Technical Olympic 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 Technical Olympic 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 Technical Olympic SA, you can compare the effects of market volatilities on General Commercial and Technical Olympic 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 Technical Olympic. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Commercial and Technical Olympic.
Diversification Opportunities for General Commercial and Technical Olympic
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between General and Technical is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding General Commercial Industrial and Technical Olympic SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technical Olympic 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 Technical Olympic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technical Olympic has no effect on the direction of General Commercial i.e., General Commercial and Technical Olympic go up and down completely randomly.
Pair Corralation between General Commercial and Technical Olympic
Assuming the 90 days trading horizon General Commercial Industrial is expected to generate 1.19 times more return on investment than Technical Olympic. However, General Commercial is 1.19 times more volatile than Technical Olympic SA. It trades about 0.17 of its potential returns per unit of risk. Technical Olympic SA is currently generating about 0.12 per unit of risk. If you would invest 140.00 in General Commercial Industrial on November 5, 2024 and sell it today you would earn a total of 6.00 from holding General Commercial Industrial or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Commercial Industrial vs. Technical Olympic SA
Performance |
| Timeline |
| General Commercial |
| Technical Olympic |
General Commercial and Technical Olympic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Commercial and Technical Olympic
The main advantage of trading using opposite General Commercial and Technical Olympic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Commercial position performs unexpectedly, Technical Olympic 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 Technical Olympic will offset losses from the drop in Technical Olympic'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 |
| Technical Olympic vs. Profile Systems Software | Technical Olympic vs. Elton International Trading | Technical Olympic vs. Optronics Technologies SA | Technical Olympic vs. Sidma SA Steel |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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