Correlation Between Karelia Tobacco and Kordellos
Can any of the company-specific risk be diversified away by investing in both Karelia Tobacco and Kordellos 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 Kordellos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karelia Tobacco and Kordellos Ch Bros, you can compare the effects of market volatilities on Karelia Tobacco and Kordellos 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 Kordellos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karelia Tobacco and Kordellos.
Diversification Opportunities for Karelia Tobacco and Kordellos
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Karelia and Kordellos is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Karelia Tobacco and Kordellos Ch Bros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kordellos Ch Bros 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 Kordellos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kordellos Ch Bros has no effect on the direction of Karelia Tobacco i.e., Karelia Tobacco and Kordellos go up and down completely randomly.
Pair Corralation between Karelia Tobacco and Kordellos
Assuming the 90 days trading horizon Karelia Tobacco is expected to under-perform the Kordellos. But the stock apears to be less risky and, when comparing its historical volatility, Karelia Tobacco is 2.21 times less risky than Kordellos. The stock trades about -0.16 of its potential returns per unit of risk. The Kordellos Ch Bros is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Kordellos Ch Bros on September 2, 2024 and sell it today you would earn a total of 1.00 from holding Kordellos Ch Bros or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Karelia Tobacco vs. Kordellos Ch Bros
Performance |
| Timeline |
| Karelia Tobacco |
| Kordellos Ch Bros |
Karelia Tobacco and Kordellos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karelia Tobacco and Kordellos
The main advantage of trading using opposite Karelia Tobacco and Kordellos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karelia Tobacco position performs unexpectedly, Kordellos 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 Kordellos will offset losses from the drop in Kordellos' long position.| Karelia Tobacco vs. Greek Organization of | Karelia Tobacco vs. Jumbo SA | Karelia Tobacco vs. Mytilineos SA | Karelia Tobacco vs. Motor Oil Corinth |
| Kordellos vs. Elvalhalcor Hellenic Copper | Kordellos vs. Karelia Tobacco | Kordellos vs. Hellenic Telecommunications Organization | Kordellos vs. Sidma SA Steel |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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