Correlation Between Lampsa Hellenic and Piraeus Financial
Can any of the company-specific risk be diversified away by investing in both Lampsa Hellenic and Piraeus Financial 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 Lampsa Hellenic and Piraeus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lampsa Hellenic Hotels and Piraeus Financial Holdings, you can compare the effects of market volatilities on Lampsa Hellenic and Piraeus Financial 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 Lampsa Hellenic with a short position of Piraeus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lampsa Hellenic and Piraeus Financial.
Diversification Opportunities for Lampsa Hellenic and Piraeus Financial
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lampsa and Piraeus is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lampsa Hellenic Hotels and Piraeus Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Financial and Lampsa Hellenic 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 Lampsa Hellenic Hotels are associated (or correlated) with Piraeus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Financial has no effect on the direction of Lampsa Hellenic i.e., Lampsa Hellenic and Piraeus Financial go up and down completely randomly.
Pair Corralation between Lampsa Hellenic and Piraeus Financial
Assuming the 90 days trading horizon Lampsa Hellenic Hotels is expected to generate 0.56 times more return on investment than Piraeus Financial. However, Lampsa Hellenic Hotels is 1.79 times less risky than Piraeus Financial. It trades about 0.11 of its potential returns per unit of risk. Piraeus Financial Holdings is currently generating about 0.0 per unit of risk. If you would invest 2,960 in Lampsa Hellenic Hotels on August 28, 2024 and sell it today you would earn a total of 780.00 from holding Lampsa Hellenic Hotels or generate 26.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.51% |
Values | Daily Returns |
Lampsa Hellenic Hotels vs. Piraeus Financial Holdings
Performance |
Timeline |
Lampsa Hellenic Hotels |
Piraeus Financial |
Lampsa Hellenic and Piraeus Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lampsa Hellenic and Piraeus Financial
The main advantage of trading using opposite Lampsa Hellenic and Piraeus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lampsa Hellenic position performs unexpectedly, Piraeus Financial 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 Financial will offset losses from the drop in Piraeus Financial's long position.Lampsa Hellenic vs. Thrace Plastics Holding | Lampsa Hellenic vs. Karelia Tobacco | Lampsa Hellenic vs. Technical Olympic SA | Lampsa Hellenic vs. Interlife General Insurance |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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