Correlation Between J B and EL D
Can any of the company-specific risk be diversified away by investing in both J B and EL D 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 J B and EL D into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J B Ladenis and EL D Mouzakis, you can compare the effects of market volatilities on J B and EL D 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 J B with a short position of EL D. Check out your portfolio center. Please also check ongoing floating volatility patterns of J B and EL D.
Diversification Opportunities for J B and EL D
Very weak diversification
The 3 months correlation between MIN and MOYZK is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding J B Ladenis and EL D Mouzakis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EL D Mouzakis and J B 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 J B Ladenis are associated (or correlated) with EL D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EL D Mouzakis has no effect on the direction of J B i.e., J B and EL D go up and down completely randomly.
Pair Corralation between J B and EL D
Assuming the 90 days trading horizon J B Ladenis is expected to generate 1.34 times more return on investment than EL D. However, J B is 1.34 times more volatile than EL D Mouzakis. It trades about 0.02 of its potential returns per unit of risk. EL D Mouzakis is currently generating about -0.01 per unit of risk. If you would invest 51.00 in J B Ladenis on November 9, 2024 and sell it today you would earn a total of 1.00 from holding J B Ladenis or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.73% |
| Values | Daily Returns |
J B Ladenis vs. EL D Mouzakis
Performance |
| Timeline |
| J B Ladenis |
| EL D Mouzakis |
Risk-Adjusted Performance
Weak
Weak | Strong |
J B and EL D Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J B and EL D
The main advantage of trading using opposite J B and EL D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J B position performs unexpectedly, EL D 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 EL D will offset losses from the drop in EL D's long position.| J B vs. Hellenic Telecommunications Organization | J B vs. Marfin Investment Group | J B vs. Foodlink AE | J B vs. Intertech SA Inter |
| EL D vs. Karelia Tobacco | EL D vs. Daios Plastics SA | EL D vs. Thrace Plastics Holding | EL D vs. Intracom Constructions Societe |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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