Correlation Between EL D and Lanakam SA
Can any of the company-specific risk be diversified away by investing in both EL D and Lanakam SA 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 EL D and Lanakam SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EL D Mouzakis and Lanakam SA, you can compare the effects of market volatilities on EL D and Lanakam SA 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 EL D with a short position of Lanakam SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EL D and Lanakam SA.
Diversification Opportunities for EL D and Lanakam SA
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MOYZK and Lanakam is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding EL D Mouzakis and Lanakam SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanakam SA and EL D 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 EL D Mouzakis are associated (or correlated) with Lanakam SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanakam SA has no effect on the direction of EL D i.e., EL D and Lanakam SA go up and down completely randomly.
Pair Corralation between EL D and Lanakam SA
Assuming the 90 days trading horizon EL D Mouzakis is expected to generate 0.74 times more return on investment than Lanakam SA. However, EL D Mouzakis is 1.35 times less risky than Lanakam SA. It trades about -0.13 of its potential returns per unit of risk. Lanakam SA is currently generating about -0.71 per unit of risk. If you would invest 67.00 in EL D Mouzakis on November 9, 2024 and sell it today you would lose (2.00) from holding EL D Mouzakis or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 20.0% |
| Values | Daily Returns |
EL D Mouzakis vs. Lanakam SA
Performance |
| Timeline |
| EL D Mouzakis |
Risk-Adjusted Performance
Weak
Weak | Strong |
| Lanakam SA |
Risk-Adjusted Performance
Solid
Weak | Strong |
EL D and Lanakam SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EL D and Lanakam SA
The main advantage of trading using opposite EL D and Lanakam SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EL D position performs unexpectedly, Lanakam SA 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 Lanakam SA will offset losses from the drop in Lanakam SA's long position.| EL D vs. Karelia Tobacco | EL D vs. Daios Plastics SA | EL D vs. Thrace Plastics Holding | EL D vs. Intracom Constructions Societe |
| Lanakam SA vs. General Commercial Industrial | Lanakam SA vs. Profile Systems Software | Lanakam SA vs. Hellenic Telecommunications Organization | Lanakam SA vs. Eurobank Ergasias Services |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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