Correlation Between Karelia Tobacco and Athens General
Can any of the company-specific risk be diversified away by investing in both Karelia Tobacco and Athens General 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 Karelia Tobacco and Athens General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karelia Tobacco and Athens General Composite, you can compare the effects of market volatilities on Karelia Tobacco and Athens General 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 Karelia Tobacco with a short position of Athens General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karelia Tobacco and Athens General.
Diversification Opportunities for Karelia Tobacco and Athens General
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Karelia and Athens is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Karelia Tobacco and Athens General Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athens General Composite and Karelia Tobacco 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 Karelia Tobacco are associated (or correlated) with Athens General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athens General Composite has no effect on the direction of Karelia Tobacco i.e., Karelia Tobacco and Athens General go up and down completely randomly.
Pair Corralation between Karelia Tobacco and Athens General
Assuming the 90 days trading horizon Karelia Tobacco is expected to under-perform the Athens General. In addition to that, Karelia Tobacco is 1.53 times more volatile than Athens General Composite. It trades about -0.04 of its total potential returns per unit of risk. Athens General Composite is currently generating about 0.1 per unit of volatility. If you would invest 138,183 in Athens General Composite on August 31, 2024 and sell it today you would earn a total of 2,200 from holding Athens General Composite or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karelia Tobacco vs. Athens General Composite
Performance |
| Timeline |
Karelia Tobacco and Athens General Volatility Contrast
Predicted Return Density |
| Returns |
Karelia Tobacco
Pair trading matchups for Karelia Tobacco
Athens General Composite
Pair trading matchups for Athens General
Pair Trading with Karelia Tobacco and Athens General
The main advantage of trading using opposite Karelia Tobacco and Athens General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karelia Tobacco position performs unexpectedly, Athens General 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 Athens General will offset losses from the drop in Athens General's long position.| Karelia Tobacco vs. Greek Organization of | Karelia Tobacco vs. Jumbo SA | Karelia Tobacco vs. Mytilineos SA | Karelia Tobacco vs. Motor Oil Corinth |
| Athens General vs. CPI Computer Peripherals | Athens General vs. Bank of Greece | Athens General vs. Karelia Tobacco | Athens General vs. Aegean Airlines 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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