Correlation Between Karelia Tobacco and Daios Plastics
Can any of the company-specific risk be diversified away by investing in both Karelia Tobacco and Daios Plastics 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 Daios Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karelia Tobacco and Daios Plastics SA, you can compare the effects of market volatilities on Karelia Tobacco and Daios Plastics 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 Daios Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karelia Tobacco and Daios Plastics.
Diversification Opportunities for Karelia Tobacco and Daios Plastics
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Karelia and Daios is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Karelia Tobacco and Daios Plastics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daios Plastics SA 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 Daios Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daios Plastics SA has no effect on the direction of Karelia Tobacco i.e., Karelia Tobacco and Daios Plastics go up and down completely randomly.
Pair Corralation between Karelia Tobacco and Daios Plastics
Assuming the 90 days trading horizon Karelia Tobacco is expected to under-perform the Daios Plastics. But the stock apears to be less risky and, when comparing its historical volatility, Karelia Tobacco is 4.03 times less risky than Daios Plastics. The stock trades about -0.04 of its potential returns per unit of risk. The Daios Plastics SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 358.00 in Daios Plastics SA on August 24, 2024 and sell it today you would earn a total of 8.00 from holding Daios Plastics SA or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Karelia Tobacco vs. Daios Plastics SA
Performance |
| Timeline |
| Karelia Tobacco |
| Daios Plastics SA |
Karelia Tobacco and Daios Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karelia Tobacco and Daios Plastics
The main advantage of trading using opposite Karelia Tobacco and Daios Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karelia Tobacco position performs unexpectedly, Daios Plastics 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 Daios Plastics will offset losses from the drop in Daios Plastics' long position.| Karelia Tobacco vs. Greek Organization of | Karelia Tobacco vs. Jumbo SA | Karelia Tobacco vs. Mytilineos SA | Karelia Tobacco vs. Motor Oil Corinth |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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