Correlation Between Elvalhalcor Hellenic and Intracom Constructions

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

By analyzing existing cross correlation between Elvalhalcor Hellenic Copper and Intracom Constructions Societe, you can compare the effects of market volatilities on Elvalhalcor Hellenic and Intracom Constructions 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 Elvalhalcor Hellenic with a short position of Intracom Constructions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elvalhalcor Hellenic and Intracom Constructions.

Diversification Opportunities for Elvalhalcor Hellenic and Intracom Constructions

0.16

Correlation Coefficient

Elvalhalcor Hellenic  Intracom Constructions

Average diversification

The 3 months correlation between Elvalhalcor and Intracom is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Elvalhalcor Hellenic Copper and Intracom Constructions Societe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intracom Constructions and Elvalhalcor Hellenic 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 Elvalhalcor Hellenic Copper are associated (or correlated) with Intracom Constructions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intracom Constructions has no effect on the direction of Elvalhalcor Hellenic i.e., Elvalhalcor Hellenic and Intracom Constructions go up and down completely randomly.

Pair Corralation between Elvalhalcor Hellenic and Intracom Constructions

Assuming the 90 days trading horizon Elvalhalcor Hellenic Copper is expected to generate 1.5 times more return on investment than Intracom Constructions. However, Elvalhalcor Hellenic is 1.5 times more volatile than Intracom Constructions Societe. It trades about 0.02 of its potential returns per unit of risk. Intracom Constructions Societe is currently generating about -0.04 per unit of risk. If you would invest  186.00  in Elvalhalcor Hellenic Copper on September 5, 2024 and sell it today you would earn a total of  3.00  from holding Elvalhalcor Hellenic Copper or generate 1.61% return on investment over 90 days.

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

Elvalhalcor Hellenic Copper  vs.  Intracom Constructions Societe

Elvalhalcor Hellenic

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Elvalhalcor Hellenic Copper are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Elvalhalcor Hellenic is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Intracom Constructions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intracom Constructions Societe has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Intracom Constructions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Elvalhalcor Hellenic and Intracom Constructions

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

The idea behind Elvalhalcor Hellenic Copper and Intracom Constructions Societe 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.