Correlation Between Pipe Works and Kordellos
Can any of the company-specific risk be diversified away by investing in both Pipe Works and Kordellos 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 Pipe Works and Kordellos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pipe Works L and Kordellos Ch Bros, you can compare the effects of market volatilities on Pipe Works and Kordellos 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 Pipe Works with a short position of Kordellos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pipe Works and Kordellos.
Diversification Opportunities for Pipe Works and Kordellos
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pipe and Kordellos is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Pipe Works L and Kordellos Ch Bros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kordellos Ch Bros and Pipe Works 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 Pipe Works L are associated (or correlated) with Kordellos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kordellos Ch Bros has no effect on the direction of Pipe Works i.e., Pipe Works and Kordellos go up and down completely randomly.
Pair Corralation between Pipe Works and Kordellos
Assuming the 90 days trading horizon Pipe Works is expected to generate 1.12 times less return on investment than Kordellos. But when comparing it to its historical volatility, Pipe Works L is 1.04 times less risky than Kordellos. It trades about 0.06 of its potential returns per unit of risk. Kordellos Ch Bros is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Kordellos Ch Bros on September 2, 2024 and sell it today you would earn a total of 1.00 from holding Kordellos Ch Bros or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pipe Works L vs. Kordellos Ch Bros
Performance |
| Timeline |
| Pipe Works L |
| Kordellos Ch Bros |
Pipe Works and Kordellos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pipe Works and Kordellos
The main advantage of trading using opposite Pipe Works and Kordellos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pipe Works position performs unexpectedly, Kordellos 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 Kordellos will offset losses from the drop in Kordellos' long position.| Pipe Works vs. Optima bank SA | Pipe Works vs. Optronics Technologies SA | Pipe Works vs. Foodlink AE | Pipe Works vs. Athens Medical CSA |
| Kordellos vs. Elvalhalcor Hellenic Copper | Kordellos vs. Karelia Tobacco | Kordellos vs. Hellenic Telecommunications Organization | Kordellos vs. Sidma SA Steel |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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