Correlation Between Advanced Info and Hellenic Telecommunicatio

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

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

Diversification Opportunities for Advanced Info and Hellenic Telecommunicatio

-0.29

Correlation Coefficient

Advanced Info  Hellenic Telecommunicatio

Very good diversification

The 3 months correlation between Advanced and Hellenic is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Info Service and Hellenic Telecommunications Or in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hellenic Telecommunicatio and Advanced Info 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 Advanced Info Service 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 Advanced Info i.e., Advanced Info and Hellenic Telecommunicatio go up and down completely randomly.

Pair Corralation between Advanced Info and Hellenic Telecommunicatio

Assuming the 90 days horizon Advanced Info Service is expected to generate 2.26 times more return on investment than Hellenic Telecommunicatio. However, Advanced Info is 2.26 times more volatile than Hellenic Telecommunications Org. It trades about 0.1 of its potential returns per unit of risk. Hellenic Telecommunications Org is currently generating about -0.05 per unit of risk. If you would invest  785.00  in Advanced Info Service on September 14, 2024 and sell it today you would earn a total of  174.00  from holding Advanced Info Service or generate 22.17% return on investment over 90 days.

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

Advanced Info Service  vs.  Hellenic Telecommunications Or

Advanced Info Service

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Info Service are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Advanced Info showed solid returns over the last few months and may actually be approaching a breakup point.

Hellenic Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very 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 Advanced Info and Hellenic Telecommunicatio

The main advantage of trading using opposite Advanced Info and Hellenic Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Info 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 Advanced Info Service 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.