Correlation Between Karelia Tobacco and Papoutsanis
Can any of the company-specific risk be diversified away by investing in both Karelia Tobacco and Papoutsanis 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 Papoutsanis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karelia Tobacco and Papoutsanis SA, you can compare the effects of market volatilities on Karelia Tobacco and Papoutsanis 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 Papoutsanis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karelia Tobacco and Papoutsanis.
Diversification Opportunities for Karelia Tobacco and Papoutsanis
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Karelia and Papoutsanis is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Karelia Tobacco and Papoutsanis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Papoutsanis 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 Papoutsanis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Papoutsanis SA has no effect on the direction of Karelia Tobacco i.e., Karelia Tobacco and Papoutsanis go up and down completely randomly.
Pair Corralation between Karelia Tobacco and Papoutsanis
Assuming the 90 days trading horizon Karelia Tobacco is expected to under-perform the Papoutsanis. But the stock apears to be less risky and, when comparing its historical volatility, Karelia Tobacco is 1.03 times less risky than Papoutsanis. The stock trades about -0.04 of its potential returns per unit of risk. The Papoutsanis SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 225.00 in Papoutsanis SA on August 31, 2024 and sell it today you would earn a total of 11.00 from holding Papoutsanis SA or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karelia Tobacco vs. Papoutsanis SA
Performance |
| Timeline |
| Karelia Tobacco |
| Papoutsanis SA |
Karelia Tobacco and Papoutsanis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karelia Tobacco and Papoutsanis
The main advantage of trading using opposite Karelia Tobacco and Papoutsanis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karelia Tobacco position performs unexpectedly, Papoutsanis 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 Papoutsanis will offset losses from the drop in Papoutsanis' long position.| Karelia Tobacco vs. Greek Organization of | Karelia Tobacco vs. Jumbo SA | Karelia Tobacco vs. Mytilineos SA | Karelia Tobacco vs. Motor Oil Corinth |
| Papoutsanis vs. Kri Kri Milk Industry | Papoutsanis vs. Hellenic Petroleum SA | Papoutsanis vs. Aegean Airlines SA | Papoutsanis vs. Mytilineos 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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