Correlation Between Hellenic Exchanges and Athens Water

Can any of the company-specific risk be diversified away by investing in both Hellenic Exchanges and Athens Water 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 Hellenic Exchanges and Athens Water into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hellenic Exchanges and Athens Water Supply, you can compare the effects of market volatilities on Hellenic Exchanges and Athens Water 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 Hellenic Exchanges with a short position of Athens Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hellenic Exchanges and Athens Water.

Diversification Opportunities for Hellenic Exchanges and Athens Water

-0.1

Correlation Coefficient

Hellenic Exchanges  Athens Water

Good diversification

The 3 months correlation between Hellenic and Athens is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Exchanges and Athens Water Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athens Water Supply and Hellenic Exchanges 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 Hellenic Exchanges are associated (or correlated) with Athens Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athens Water Supply has no effect on the direction of Hellenic Exchanges i.e., Hellenic Exchanges and Athens Water go up and down completely randomly.

Pair Corralation between Hellenic Exchanges and Athens Water

Assuming the 90 days trading horizon Hellenic Exchanges is expected to generate 1.13 times more return on investment than Athens Water. However, Hellenic Exchanges is 1.13 times more volatile than Athens Water Supply. It trades about -0.28 of its potential returns per unit of risk. Athens Water Supply is currently generating about -0.37 per unit of risk. If you would invest  530.00  in Hellenic Exchanges on March 19, 2024 and sell it today you would lose (32.00) from holding Hellenic Exchanges or give up 6.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hellenic Exchanges   vs.  Athens Water Supply

Hellenic Exchanges

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hellenic Exchanges has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Athens Water Supply

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Athens Water Supply are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Athens Water is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hellenic Exchanges and Athens Water

The main advantage of trading using opposite Hellenic Exchanges and Athens Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hellenic Exchanges position performs unexpectedly, Athens Water 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 Water will offset losses from the drop in Athens Water's long position.

The idea behind Hellenic Exchanges and Athens Water Supply 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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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.