Correlation Between Optronics Technologies and Philippos Nakas
Can any of the company-specific risk be diversified away by investing in both Optronics Technologies and Philippos Nakas 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 Optronics Technologies and Philippos Nakas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optronics Technologies SA and Philippos Nakas SA, you can compare the effects of market volatilities on Optronics Technologies and Philippos Nakas 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 Optronics Technologies with a short position of Philippos Nakas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optronics Technologies and Philippos Nakas.
Diversification Opportunities for Optronics Technologies and Philippos Nakas
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Optronics and Philippos is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Optronics Technologies SA and Philippos Nakas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philippos Nakas SA and Optronics Technologies 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 Optronics Technologies SA are associated (or correlated) with Philippos Nakas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philippos Nakas SA has no effect on the direction of Optronics Technologies i.e., Optronics Technologies and Philippos Nakas go up and down completely randomly.
Pair Corralation between Optronics Technologies and Philippos Nakas
Assuming the 90 days trading horizon Optronics Technologies SA is expected to under-perform the Philippos Nakas. But the stock apears to be less risky and, when comparing its historical volatility, Optronics Technologies SA is 1.28 times less risky than Philippos Nakas. The stock trades about -0.01 of its potential returns per unit of risk. The Philippos Nakas SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 222.00 in Philippos Nakas SA on September 12, 2024 and sell it today you would earn a total of 86.00 from holding Philippos Nakas SA or generate 38.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.49% |
| Values | Daily Returns |
Optronics Technologies SA vs. Philippos Nakas SA
Performance |
| Timeline |
| Optronics Technologies |
| Philippos Nakas SA |
Optronics Technologies and Philippos Nakas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optronics Technologies and Philippos Nakas
The main advantage of trading using opposite Optronics Technologies and Philippos Nakas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optronics Technologies position performs unexpectedly, Philippos Nakas 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 Philippos Nakas will offset losses from the drop in Philippos Nakas' long position.| Optronics Technologies vs. Admie Holding SA | Optronics Technologies vs. Coca Cola HBC AG | Optronics Technologies vs. Quest Holdings SA | Optronics Technologies vs. Motor Oil Corinth |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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