Correlation Between LAMDA Development and Piraeus Port
Can any of the company-specific risk be diversified away by investing in both LAMDA Development and Piraeus Port 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 LAMDA Development and Piraeus Port into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAMDA Development SA and Piraeus Port Authority, you can compare the effects of market volatilities on LAMDA Development and Piraeus Port 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 LAMDA Development with a short position of Piraeus Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAMDA Development and Piraeus Port.
Diversification Opportunities for LAMDA Development and Piraeus Port
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between LAMDA and Piraeus is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding LAMDA Development SA and Piraeus Port Authority in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Port Authority and LAMDA Development 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 LAMDA Development SA are associated (or correlated) with Piraeus Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Port Authority has no effect on the direction of LAMDA Development i.e., LAMDA Development and Piraeus Port go up and down completely randomly.
Pair Corralation between LAMDA Development and Piraeus Port
Assuming the 90 days trading horizon LAMDA Development is expected to generate 2.46 times less return on investment than Piraeus Port. In addition to that, LAMDA Development is 1.06 times more volatile than Piraeus Port Authority. It trades about 0.04 of its total potential returns per unit of risk. Piraeus Port Authority is currently generating about 0.1 per unit of volatility. If you would invest 1,526 in Piraeus Port Authority on September 2, 2024 and sell it today you would earn a total of 1,609 from holding Piraeus Port Authority or generate 105.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAMDA Development SA vs. Piraeus Port Authority
Performance |
| Timeline |
| LAMDA Development |
| Piraeus Port Authority |
LAMDA Development and Piraeus Port Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAMDA Development and Piraeus Port
The main advantage of trading using opposite LAMDA Development and Piraeus Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAMDA Development position performs unexpectedly, Piraeus Port 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 Piraeus Port will offset losses from the drop in Piraeus Port's long position.| LAMDA Development vs. Profile Systems Software | LAMDA Development vs. General Commercial Industrial | LAMDA Development vs. Performance Technologies SA | LAMDA Development vs. Karelia Tobacco |
| Piraeus Port vs. Attica Holdings SA | Piraeus Port vs. Thessaloniki Port Authority | Piraeus Port vs. National Bank of | Piraeus Port vs. EL D Mouzakis |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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