Correlation Between Bank Central and Hellenic Telecommunicatio

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

By analyzing existing cross correlation between Bank Central Asia and Hellenic Telecommunications Org, you can compare the effects of market volatilities on Bank Central and Hellenic Telecommunicatio 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 Bank Central with a short position of Hellenic Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Hellenic Telecommunicatio.

Diversification Opportunities for Bank Central and Hellenic Telecommunicatio

0.75

Correlation Coefficient

Bank Central  Hellenic Telecommunicatio

Poor diversification

The 3 months correlation between Bank and Hellenic is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Hellenic Telecommunications Or in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hellenic Telecommunicatio and Bank Central 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 Bank Central Asia are associated (or correlated) with Hellenic Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hellenic Telecommunicatio has no effect on the direction of Bank Central i.e., Bank Central and Hellenic Telecommunicatio go up and down completely randomly.

Pair Corralation between Bank Central and Hellenic Telecommunicatio

Assuming the 90 days horizon Bank Central Asia is expected to under-perform the Hellenic Telecommunicatio. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Central Asia is 1.44 times less risky than Hellenic Telecommunicatio. The pink sheet trades about -0.18 of its potential returns per unit of risk. The Hellenic Telecommunications Org is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  856.00  in Hellenic Telecommunications Org on August 16, 2024 and sell it today you would lose (36.00) from holding Hellenic Telecommunications Org or give up 4.21% of portfolio value over 90 days.

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

Bank Central Asia  vs.  Hellenic Telecommunications Or

Bank Central Asia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Central Asia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Bank Central is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Hellenic Telecommunicatio

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Hellenic Telecommunications Org has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Hellenic Telecommunicatio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bank Central and Hellenic Telecommunicatio

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

The idea behind Bank Central Asia and Hellenic Telecommunications Org 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.