Correlation Between Karelia Tobacco and Hellenic Exchanges
Can any of the company-specific risk be diversified away by investing in both Karelia Tobacco and Hellenic Exchanges 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 Hellenic Exchanges into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karelia Tobacco and Hellenic Exchanges , you can compare the effects of market volatilities on Karelia Tobacco and Hellenic Exchanges 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 Hellenic Exchanges. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karelia Tobacco and Hellenic Exchanges.
Diversification Opportunities for Karelia Tobacco and Hellenic Exchanges
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Karelia and Hellenic is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Karelia Tobacco and Hellenic Exchanges in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hellenic Exchanges 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 Hellenic Exchanges. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hellenic Exchanges has no effect on the direction of Karelia Tobacco i.e., Karelia Tobacco and Hellenic Exchanges go up and down completely randomly.
Pair Corralation between Karelia Tobacco and Hellenic Exchanges
Assuming the 90 days trading horizon Karelia Tobacco is expected to generate 1.55 times less return on investment than Hellenic Exchanges. But when comparing it to its historical volatility, Karelia Tobacco is 1.32 times less risky than Hellenic Exchanges. It trades about 0.04 of its potential returns per unit of risk. Hellenic Exchanges is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 303.00 in Hellenic Exchanges on August 27, 2024 and sell it today you would earn a total of 127.00 from holding Hellenic Exchanges or generate 41.91% 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. Hellenic Exchanges
Performance |
| Timeline |
| Karelia Tobacco |
| Hellenic Exchanges |
Karelia Tobacco and Hellenic Exchanges Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karelia Tobacco and Hellenic Exchanges
The main advantage of trading using opposite Karelia Tobacco and Hellenic Exchanges positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karelia Tobacco position performs unexpectedly, Hellenic Exchanges 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 Hellenic Exchanges will offset losses from the drop in Hellenic Exchanges' long position.| Karelia Tobacco vs. Greek Organization of | Karelia Tobacco vs. Jumbo SA | Karelia Tobacco vs. Mytilineos SA | Karelia Tobacco vs. Motor Oil Corinth |
| Hellenic Exchanges vs. Greek Organization of | Hellenic Exchanges vs. Mytilineos SA | Hellenic Exchanges vs. Hellenic Telecommunications Organization | Hellenic Exchanges vs. Hellenic Petroleum 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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