Correlation Between Public Power and N Leventeris
Can any of the company-specific risk be diversified away by investing in both Public Power and N Leventeris 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 N Leventeris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Power and N Leventeris SA, you can compare the effects of market volatilities on Public Power and N Leventeris 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 N Leventeris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Power and N Leventeris.
Diversification Opportunities for Public Power and N Leventeris
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Public and LEBEP is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Public Power and N Leventeris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Leventeris 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 N Leventeris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Leventeris SA has no effect on the direction of Public Power i.e., Public Power and N Leventeris go up and down completely randomly.
Pair Corralation between Public Power and N Leventeris
Assuming the 90 days trading horizon Public Power is expected to generate 1.52 times less return on investment than N Leventeris. But when comparing it to its historical volatility, Public Power is 2.89 times less risky than N Leventeris. It trades about 0.06 of its potential returns per unit of risk. N Leventeris SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 29.00 in N Leventeris SA on August 27, 2024 and sell it today you would earn a total of 5.00 from holding N Leventeris SA or generate 17.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Public Power vs. N Leventeris SA
Performance |
| Timeline |
| Public Power |
| N Leventeris SA |
Public Power and N Leventeris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Power and N Leventeris
The main advantage of trading using opposite Public Power and N Leventeris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Power position performs unexpectedly, N Leventeris 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 N Leventeris will offset losses from the drop in N Leventeris' long position.| Public Power vs. National Bank of | Public Power vs. EL D Mouzakis | Public Power vs. Lampsa Hellenic Hotels | Public Power vs. Eurobank Ergasias Services |
| N Leventeris vs. Intracom Holdings SA | N Leventeris vs. Public Power | N Leventeris vs. Hellenic Petroleum SA | N Leventeris vs. National Bank 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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