Correlation Between Intertech and E Pairis
Can any of the company-specific risk be diversified away by investing in both Intertech and E Pairis 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 Intertech and E Pairis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intertech SA Inter and E Pairis SA, you can compare the effects of market volatilities on Intertech and E Pairis 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 Intertech with a short position of E Pairis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intertech and E Pairis.
Diversification Opportunities for Intertech and E Pairis
Poor diversification
The 3 months correlation between Intertech and PAIR is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Intertech SA Inter and E Pairis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Pairis SA and Intertech 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 Intertech SA Inter are associated (or correlated) with E Pairis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Pairis SA has no effect on the direction of Intertech i.e., Intertech and E Pairis go up and down completely randomly.
Pair Corralation between Intertech and E Pairis
Assuming the 90 days trading horizon Intertech SA Inter is expected to under-perform the E Pairis. But the stock apears to be less risky and, when comparing its historical volatility, Intertech SA Inter is 2.42 times less risky than E Pairis. The stock trades about -0.06 of its potential returns per unit of risk. The E Pairis SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 100.00 in E Pairis SA on November 5, 2024 and sell it today you would earn a total of 6.00 from holding E Pairis SA or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intertech SA Inter vs. E Pairis SA
Performance |
| Timeline |
| Intertech SA Inter |
| E Pairis SA |
Intertech and E Pairis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intertech and E Pairis
The main advantage of trading using opposite Intertech and E Pairis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intertech position performs unexpectedly, E Pairis 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 E Pairis will offset losses from the drop in E Pairis' long position.| Intertech vs. Unibios Holdings SA | Intertech vs. Intracom Holdings SA | Intertech vs. Ideal Group SA | Intertech vs. Public Power |
| E Pairis vs. Intertech SA Inter | E Pairis vs. Lampsa Hellenic Hotels | E Pairis vs. Performance Technologies SA | E Pairis vs. Hellenic Telecommunications Organization |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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