Correlation Between Interlife General and Vogiatzoglou Systems
Can any of the company-specific risk be diversified away by investing in both Interlife General and Vogiatzoglou Systems 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 Interlife General and Vogiatzoglou Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interlife General Insurance and Vogiatzoglou Systems SA, you can compare the effects of market volatilities on Interlife General and Vogiatzoglou Systems 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 Interlife General with a short position of Vogiatzoglou Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interlife General and Vogiatzoglou Systems.
Diversification Opportunities for Interlife General and Vogiatzoglou Systems
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Interlife and Vogiatzoglou is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Interlife General Insurance and Vogiatzoglou Systems SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vogiatzoglou Systems and Interlife General 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 Interlife General Insurance are associated (or correlated) with Vogiatzoglou Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vogiatzoglou Systems has no effect on the direction of Interlife General i.e., Interlife General and Vogiatzoglou Systems go up and down completely randomly.
Pair Corralation between Interlife General and Vogiatzoglou Systems
Assuming the 90 days trading horizon Interlife General is expected to generate 1.55 times less return on investment than Vogiatzoglou Systems. But when comparing it to its historical volatility, Interlife General Insurance is 1.58 times less risky than Vogiatzoglou Systems. It trades about 0.02 of its potential returns per unit of risk. Vogiatzoglou Systems SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 187.00 in Vogiatzoglou Systems SA on September 4, 2024 and sell it today you would earn a total of 23.00 from holding Vogiatzoglou Systems SA or generate 12.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interlife General Insurance vs. Vogiatzoglou Systems SA
Performance |
| Timeline |
| Interlife General |
| Vogiatzoglou Systems |
Interlife General and Vogiatzoglou Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interlife General and Vogiatzoglou Systems
The main advantage of trading using opposite Interlife General and Vogiatzoglou Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interlife General position performs unexpectedly, Vogiatzoglou Systems 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 Vogiatzoglou Systems will offset losses from the drop in Vogiatzoglou Systems' long position.| Interlife General vs. Mytilineos SA | Interlife General vs. Motor Oil Corinth | Interlife General vs. Hellenic Petroleum SA |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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