Correlation Between General Commercial and Proodeftiki
Can any of the company-specific risk be diversified away by investing in both General Commercial and Proodeftiki 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 Proodeftiki 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 Proodeftiki SA, you can compare the effects of market volatilities on General Commercial and Proodeftiki 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 Proodeftiki. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Commercial and Proodeftiki.
Diversification Opportunities for General Commercial and Proodeftiki
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between General and Proodeftiki is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding General Commercial Industrial and Proodeftiki SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proodeftiki SA 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 Proodeftiki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proodeftiki SA has no effect on the direction of General Commercial i.e., General Commercial and Proodeftiki go up and down completely randomly.
Pair Corralation between General Commercial and Proodeftiki
Assuming the 90 days trading horizon General Commercial Industrial is expected to generate 0.49 times more return on investment than Proodeftiki. However, General Commercial Industrial is 2.03 times less risky than Proodeftiki. It trades about 0.02 of its potential returns per unit of risk. Proodeftiki SA is currently generating about -0.01 per unit of risk. If you would invest 115.00 in General Commercial Industrial on September 14, 2024 and sell it today you would earn a total of 18.00 from holding General Commercial Industrial or generate 15.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
General Commercial Industrial vs. Proodeftiki SA
Performance |
| Timeline |
| General Commercial |
| Proodeftiki SA |
General Commercial and Proodeftiki Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Commercial and Proodeftiki
The main advantage of trading using opposite General Commercial and Proodeftiki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Commercial position performs unexpectedly, Proodeftiki 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 Proodeftiki will offset losses from the drop in Proodeftiki'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 |
| Proodeftiki vs. Interlife General Insurance | Proodeftiki vs. Intertech SA Inter | Proodeftiki vs. Sidma SA Steel | Proodeftiki vs. General Commercial Industrial |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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