Correlation Between Public Power and Admie Holding
Can any of the company-specific risk be diversified away by investing in both Public Power and Admie Holding 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 Public Power and Admie Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Power and Admie Holding SA, you can compare the effects of market volatilities on Public Power and Admie Holding 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 Public Power with a short position of Admie Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Power and Admie Holding.
Diversification Opportunities for Public Power and Admie Holding
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Public and Admie is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Public Power and Admie Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Admie Holding SA and Public Power 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 Public Power are associated (or correlated) with Admie Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Admie Holding SA has no effect on the direction of Public Power i.e., Public Power and Admie Holding go up and down completely randomly.
Pair Corralation between Public Power and Admie Holding
Assuming the 90 days trading horizon Public Power is expected to generate 4.21 times less return on investment than Admie Holding. But when comparing it to its historical volatility, Public Power is 1.08 times less risky than Admie Holding. It trades about 0.04 of its potential returns per unit of risk. Admie Holding SA is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 266.00 in Admie Holding SA on November 28, 2024 and sell it today you would earn a total of 14.00 from holding Admie Holding SA or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Power vs. Admie Holding SA
Performance |
| Timeline |
| Public Power |
| Admie Holding SA |
Public Power and Admie Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Power and Admie Holding
The main advantage of trading using opposite Public Power and Admie Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Power position performs unexpectedly, Admie Holding 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 Admie Holding will offset losses from the drop in Admie Holding's long position.| Public Power vs. Mytilineos SA | Public Power vs. Greek Organization of | Public Power vs. Hellenic Telecommunications Organization | Public Power vs. Alpha Services and |
| Admie Holding vs. Public Power | Admie Holding vs. Mytilineos SA | Admie Holding vs. Hellenic Petroleum SA | Admie Holding vs. Greek Organization of |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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