Correlation Between Daios Plastics and Athens Medical

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

By analyzing existing cross correlation between Daios Plastics SA and Athens Medical CSA, you can compare the effects of market volatilities on Daios Plastics and Athens Medical 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 Daios Plastics with a short position of Athens Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daios Plastics and Athens Medical.

Diversification Opportunities for Daios Plastics and Athens Medical

-0.22

Correlation Coefficient

Daios Plastics  Athens Medical

Very good diversification

The 3 months correlation between Daios and Athens is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Daios Plastics SA and Athens Medical CSA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athens Medical CSA and Daios Plastics 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 Daios Plastics SA are associated (or correlated) with Athens Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athens Medical CSA has no effect on the direction of Daios Plastics i.e., Daios Plastics and Athens Medical go up and down completely randomly.

Pair Corralation between Daios Plastics and Athens Medical

Assuming the 90 days trading horizon Daios Plastics SA is expected to generate 2.24 times more return on investment than Athens Medical. However, Daios Plastics is 2.24 times more volatile than Athens Medical CSA. It trades about 0.06 of its potential returns per unit of risk. Athens Medical CSA is currently generating about -0.03 per unit of risk. If you would invest  328.00  in Daios Plastics SA on September 2, 2024 and sell it today you would earn a total of  32.00  from holding Daios Plastics SA or generate 9.76% return on investment over 90 days.

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

Daios Plastics SA  vs.  Athens Medical CSA

Daios Plastics SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Daios Plastics SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Daios Plastics sustained solid returns over the last few months and may actually be approaching a breakup point.

Athens Medical CSA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Athens Medical CSA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Athens Medical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Daios Plastics and Athens Medical

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

The idea behind Daios Plastics SA and Athens Medical CSA 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.