Correlation Between Athens Medical and Piraeus Port
Can any of the company-specific risk be diversified away by investing in both Athens Medical and Piraeus Port 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 Medical and Piraeus Port into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athens Medical CSA and Piraeus Port Authority, you can compare the effects of market volatilities on Athens Medical and Piraeus Port 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 Medical with a short position of Piraeus Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athens Medical and Piraeus Port.
Diversification Opportunities for Athens Medical and Piraeus Port
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Athens and Piraeus is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Athens Medical CSA and Piraeus Port Authority in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Port Authority and Athens Medical 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 Medical CSA are associated (or correlated) with Piraeus Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Port Authority has no effect on the direction of Athens Medical i.e., Athens Medical and Piraeus Port go up and down completely randomly.
Pair Corralation between Athens Medical and Piraeus Port
Assuming the 90 days trading horizon Athens Medical CSA is expected to under-perform the Piraeus Port. But the stock apears to be less risky and, when comparing its historical volatility, Athens Medical CSA is 1.25 times less risky than Piraeus Port. The stock trades about -0.05 of its potential returns per unit of risk. The Piraeus Port Authority is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,800 in Piraeus Port Authority on August 28, 2024 and sell it today you would earn a total of 300.00 from holding Piraeus Port Authority or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athens Medical CSA vs. Piraeus Port Authority
Performance |
| Timeline |
| Athens Medical CSA |
| Piraeus Port Authority |
Athens Medical and Piraeus Port Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athens Medical and Piraeus Port
The main advantage of trading using opposite Athens Medical and Piraeus Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athens Medical position performs unexpectedly, Piraeus Port 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 Piraeus Port will offset losses from the drop in Piraeus Port's long position.| Athens Medical vs. Hellenic Exchanges | Athens Medical vs. Hellenic Telecommunications Organization | Athens Medical vs. GEK TERNA Holdings | Athens Medical vs. Piraeus Port Authority |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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