Correlation Between Karelia Tobacco and Logismos Information

Can any of the company-specific risk be diversified away by investing in both Karelia Tobacco and Logismos Information 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 Karelia Tobacco and Logismos Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Karelia Tobacco and Logismos Information Systems, you can compare the effects of market volatilities on Karelia Tobacco and Logismos Information 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 Karelia Tobacco with a short position of Logismos Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karelia Tobacco and Logismos Information.

Diversification Opportunities for Karelia Tobacco and Logismos Information

-0.32

Correlation Coefficient

Karelia Tobacco  Logismos Information

Very good diversification

The 3 months correlation between Karelia and Logismos is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Karelia Tobacco and Logismos Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logismos Information and Karelia Tobacco 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 Karelia Tobacco are associated (or correlated) with Logismos Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logismos Information has no effect on the direction of Karelia Tobacco i.e., Karelia Tobacco and Logismos Information go up and down completely randomly.

Pair Corralation between Karelia Tobacco and Logismos Information

Assuming the 90 days trading horizon Karelia Tobacco is expected to under-perform the Logismos Information. But the stock apears to be less risky and, when comparing its historical volatility, Karelia Tobacco is 2.62 times less risky than Logismos Information. The stock trades about -0.1 of its potential returns per unit of risk. The Logismos Information Systems is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  126.00  in Logismos Information Systems on September 15, 2024 and sell it today you would earn a total of  25.00  from holding Logismos Information Systems or generate 19.84% return on investment over 90 days.

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

Karelia Tobacco  vs.  Logismos Information Systems

Karelia Tobacco

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Karelia Tobacco are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Karelia Tobacco is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Logismos Information

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Logismos Information Systems are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Logismos Information may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Karelia Tobacco and Logismos Information

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

The idea behind Karelia Tobacco and Logismos Information Systems 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.