Correlation Between Greek Organization and Athens Medical
Can any of the company-specific risk be diversified away by investing in both Greek Organization and Athens Medical 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 Greek Organization and Athens Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greek Organization of and Athens Medical CSA, you can compare the effects of market volatilities on Greek Organization and Athens Medical 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 Greek Organization with a short position of Athens Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greek Organization and Athens Medical.
Diversification Opportunities for Greek Organization and Athens Medical
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Greek and Athens is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Greek Organization of and Athens Medical CSA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athens Medical CSA and Greek Organization 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 Greek Organization of are associated (or correlated) with Athens Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athens Medical CSA has no effect on the direction of Greek Organization i.e., Greek Organization and Athens Medical go up and down completely randomly.
Pair Corralation between Greek Organization and Athens Medical
Assuming the 90 days trading horizon Greek Organization of is expected to generate 0.62 times more return on investment than Athens Medical. However, Greek Organization of is 1.61 times less risky than Athens Medical. It trades about 0.04 of its potential returns per unit of risk. Athens Medical CSA is currently generating about 0.0 per unit of risk. If you would invest 1,542 in Greek Organization of on October 26, 2024 and sell it today you would earn a total of 76.00 from holding Greek Organization of or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greek Organization of vs. Athens Medical CSA
Performance |
| Timeline |
| Greek Organization |
| Athens Medical CSA |
Greek Organization and Athens Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greek Organization and Athens Medical
The main advantage of trading using opposite Greek Organization and Athens Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greek Organization position performs unexpectedly, Athens Medical 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 Athens Medical will offset losses from the drop in Athens Medical's long position.| Greek Organization vs. Mytilineos SA | Greek Organization vs. Hellenic Telecommunications Organization | Greek Organization vs. Motor Oil Corinth | Greek Organization vs. Alpha Services and |
| Athens Medical vs. Hellenic Exchanges | Athens Medical vs. Hellenic Telecommunications Organization | Athens Medical vs. GEK TERNA Holdings | Athens Medical vs. Piraeus Port Authority |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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