Correlation Between Technical Olympic and Nafpaktos Textile
Can any of the company-specific risk be diversified away by investing in both Technical Olympic and Nafpaktos Textile 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 Technical Olympic and Nafpaktos Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technical Olympic SA and Nafpaktos Textile Industry, you can compare the effects of market volatilities on Technical Olympic and Nafpaktos Textile 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 Technical Olympic with a short position of Nafpaktos Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technical Olympic and Nafpaktos Textile.
Diversification Opportunities for Technical Olympic and Nafpaktos Textile
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Technical and Nafpaktos is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Technical Olympic SA and Nafpaktos Textile Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nafpaktos Textile and Technical Olympic 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 Technical Olympic SA are associated (or correlated) with Nafpaktos Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nafpaktos Textile has no effect on the direction of Technical Olympic i.e., Technical Olympic and Nafpaktos Textile go up and down completely randomly.
Pair Corralation between Technical Olympic and Nafpaktos Textile
Assuming the 90 days trading horizon Technical Olympic SA is expected to generate 0.67 times more return on investment than Nafpaktos Textile. However, Technical Olympic SA is 1.5 times less risky than Nafpaktos Textile. It trades about 0.04 of its potential returns per unit of risk. Nafpaktos Textile Industry is currently generating about -0.01 per unit of risk. If you would invest 207.00 in Technical Olympic SA on October 25, 2024 and sell it today you would earn a total of 53.00 from holding Technical Olympic SA or generate 25.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Technical Olympic SA vs. Nafpaktos Textile Industry
Performance |
| Timeline |
| Technical Olympic |
| Nafpaktos Textile |
Technical Olympic and Nafpaktos Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technical Olympic and Nafpaktos Textile
The main advantage of trading using opposite Technical Olympic and Nafpaktos Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technical Olympic position performs unexpectedly, Nafpaktos Textile 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 Nafpaktos Textile will offset losses from the drop in Nafpaktos Textile's long position.| Technical Olympic vs. Profile Systems Software | Technical Olympic vs. As Commercial Industrial | Technical Olympic vs. Karelia Tobacco | Technical Olympic vs. Marfin Investment Group |
| Nafpaktos Textile vs. CPI Computer Peripherals | Nafpaktos Textile vs. Eurobank Ergasias Services | Nafpaktos Textile vs. Technical Olympic SA | Nafpaktos Textile vs. Marfin Investment Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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