Correlation Between Vogiatzoglou Systems and Lampsa Hellenic
Can any of the company-specific risk be diversified away by investing in both Vogiatzoglou Systems and Lampsa Hellenic 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 Vogiatzoglou Systems and Lampsa Hellenic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vogiatzoglou Systems SA and Lampsa Hellenic Hotels, you can compare the effects of market volatilities on Vogiatzoglou Systems and Lampsa Hellenic 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 Vogiatzoglou Systems with a short position of Lampsa Hellenic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vogiatzoglou Systems and Lampsa Hellenic.
Diversification Opportunities for Vogiatzoglou Systems and Lampsa Hellenic
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vogiatzoglou and Lampsa is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Vogiatzoglou Systems SA and Lampsa Hellenic Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lampsa Hellenic Hotels and Vogiatzoglou 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 Vogiatzoglou Systems SA are associated (or correlated) with Lampsa Hellenic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lampsa Hellenic Hotels has no effect on the direction of Vogiatzoglou Systems i.e., Vogiatzoglou Systems and Lampsa Hellenic go up and down completely randomly.
Pair Corralation between Vogiatzoglou Systems and Lampsa Hellenic
Assuming the 90 days trading horizon Vogiatzoglou Systems SA is expected to generate 2.62 times more return on investment than Lampsa Hellenic. However, Vogiatzoglou Systems is 2.62 times more volatile than Lampsa Hellenic Hotels. It trades about 0.18 of its potential returns per unit of risk. Lampsa Hellenic Hotels is currently generating about -0.01 per unit of risk. If you would invest 208.00 in Vogiatzoglou Systems SA on October 26, 2024 and sell it today you would earn a total of 32.00 from holding Vogiatzoglou Systems SA or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Vogiatzoglou Systems SA vs. Lampsa Hellenic Hotels
Performance |
| Timeline |
| Vogiatzoglou Systems |
| Lampsa Hellenic Hotels |
Vogiatzoglou Systems and Lampsa Hellenic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vogiatzoglou Systems and Lampsa Hellenic
The main advantage of trading using opposite Vogiatzoglou Systems and Lampsa Hellenic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vogiatzoglou Systems position performs unexpectedly, Lampsa Hellenic 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 Lampsa Hellenic will offset losses from the drop in Lampsa Hellenic's long position.The idea behind Vogiatzoglou Systems SA and Lampsa Hellenic Hotels pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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