Correlation Between Profile Systems and Athens General
Can any of the company-specific risk be diversified away by investing in both Profile Systems and Athens General 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 Profile Systems and Athens General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Profile Systems Software and Athens General Composite, you can compare the effects of market volatilities on Profile Systems and Athens General 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 Profile Systems with a short position of Athens General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profile Systems and Athens General.
Diversification Opportunities for Profile Systems and Athens General
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Profile and Athens is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Profile Systems Software and Athens General Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athens General Composite and Profile Systems 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 Profile Systems Software are associated (or correlated) with Athens General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athens General Composite has no effect on the direction of Profile Systems i.e., Profile Systems and Athens General go up and down completely randomly.
Pair Corralation between Profile Systems and Athens General
Assuming the 90 days trading horizon Profile Systems Software is expected to generate 1.92 times more return on investment than Athens General. However, Profile Systems is 1.92 times more volatile than Athens General Composite. It trades about 0.06 of its potential returns per unit of risk. Athens General Composite is currently generating about 0.06 per unit of risk. If you would invest 337.00 in Profile Systems Software on August 31, 2024 and sell it today you would earn a total of 169.00 from holding Profile Systems Software or generate 50.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profile Systems Software vs. Athens General Composite
Performance |
| Timeline |
Profile Systems and Athens General Volatility Contrast
Predicted Return Density |
| Returns |
Profile Systems Software
Pair trading matchups for Profile Systems
Athens General Composite
Pair trading matchups for Athens General
Pair Trading with Profile Systems and Athens General
The main advantage of trading using opposite Profile Systems and Athens General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profile Systems position performs unexpectedly, Athens General 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 General will offset losses from the drop in Athens General's long position.| Profile Systems vs. Terna Energy Societe | Profile Systems vs. Mytilineos SA | Profile Systems vs. Public Power | Profile Systems vs. Autohellas SA |
| Athens General vs. CPI Computer Peripherals | Athens General vs. Bank of Greece | Athens General vs. Karelia Tobacco | Athens General vs. Aegean Airlines SA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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