Correlation Between Athens Medical and Pipe Works
Can any of the company-specific risk be diversified away by investing in both Athens Medical and Pipe Works 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 Pipe Works 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 Pipe Works L, you can compare the effects of market volatilities on Athens Medical and Pipe Works 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 Pipe Works. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athens Medical and Pipe Works.
Diversification Opportunities for Athens Medical and Pipe Works
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Athens and Pipe is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Athens Medical CSA and Pipe Works L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pipe Works L 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 Pipe Works. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pipe Works L has no effect on the direction of Athens Medical i.e., Athens Medical and Pipe Works go up and down completely randomly.
Pair Corralation between Athens Medical and Pipe Works
Assuming the 90 days trading horizon Athens Medical is expected to generate 2.59 times less return on investment than Pipe Works. But when comparing it to its historical volatility, Athens Medical CSA is 1.08 times less risky than Pipe Works. It trades about 0.03 of its potential returns per unit of risk. Pipe Works L is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 139.00 in Pipe Works L on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Pipe Works L or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athens Medical CSA vs. Pipe Works L
Performance |
| Timeline |
| Athens Medical CSA |
| Pipe Works L |
Athens Medical and Pipe Works Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athens Medical and Pipe Works
The main advantage of trading using opposite Athens Medical and Pipe Works positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athens Medical position performs unexpectedly, Pipe Works 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 Pipe Works will offset losses from the drop in Pipe Works' 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 |
| Pipe Works vs. Logismos Information Systems | Pipe Works vs. Profile Systems Software | Pipe Works vs. Daios Plastics SA | Pipe Works vs. Performance Technologies SA |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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