Correlation Between Hellenic Telecommunicatio and Mermeren Kombinat

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

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

Diversification Opportunities for Hellenic Telecommunicatio and Mermeren Kombinat

0.47

Correlation Coefficient

Hellenic Telecommunicatio  Mermeren Kombinat

Very weak diversification

The 3 months correlation between Hellenic and Mermeren is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Telecommunications Or and Mermeren Kombinat AD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mermeren Kombinat and Hellenic Telecommunicatio 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 Telecommunications Organization are associated (or correlated) with Mermeren Kombinat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mermeren Kombinat has no effect on the direction of Hellenic Telecommunicatio i.e., Hellenic Telecommunicatio and Mermeren Kombinat go up and down completely randomly.

Pair Corralation between Hellenic Telecommunicatio and Mermeren Kombinat

Assuming the 90 days trading horizon Hellenic Telecommunications Organization is expected to under-perform the Mermeren Kombinat. But the stock apears to be less risky and, when comparing its historical volatility, Hellenic Telecommunications Organization is 2.49 times less risky than Mermeren Kombinat. The stock trades about -0.01 of its potential returns per unit of risk. The Mermeren Kombinat AD is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  4,000  in Mermeren Kombinat AD on September 16, 2024 and sell it today you would earn a total of  0.00  from holding Mermeren Kombinat AD or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Hellenic Telecommunications Or  vs.  Mermeren Kombinat AD

Hellenic Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mermeren Kombinat

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mermeren Kombinat AD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Mermeren Kombinat is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hellenic Telecommunicatio and Mermeren Kombinat

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

The idea behind Hellenic Telecommunications Organization and Mermeren Kombinat AD 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.