Correlation Between Lampsa Hellenic and Flexopack Socit

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

By analyzing existing cross correlation between Lampsa Hellenic Hotels and Flexopack Socit Anonyme, you can compare the effects of market volatilities on Lampsa Hellenic and Flexopack Socit 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 Lampsa Hellenic with a short position of Flexopack Socit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lampsa Hellenic and Flexopack Socit.

Diversification Opportunities for Lampsa Hellenic and Flexopack Socit

-0.5

Correlation Coefficient

Lampsa Hellenic  Flexopack Socit

Very good diversification

The 3 months correlation between Lampsa and Flexopack is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lampsa Hellenic Hotels and Flexopack Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexopack Socit Anonyme and Lampsa 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 Lampsa Hellenic Hotels are associated (or correlated) with Flexopack Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexopack Socit Anonyme has no effect on the direction of Lampsa Hellenic i.e., Lampsa Hellenic and Flexopack Socit go up and down completely randomly.

Pair Corralation between Lampsa Hellenic and Flexopack Socit

Assuming the 90 days trading horizon Lampsa Hellenic is expected to generate 1.04 times less return on investment than Flexopack Socit. But when comparing it to its historical volatility, Lampsa Hellenic Hotels is 3.8 times less risky than Flexopack Socit. It trades about 0.08 of its potential returns per unit of risk. Flexopack Socit Anonyme is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  780.00  in Flexopack Socit Anonyme on September 13, 2024 and sell it today you would earn a total of  10.00  from holding Flexopack Socit Anonyme or generate 1.28% return on investment over 90 days.

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

Lampsa Hellenic Hotels  vs.  Flexopack Socit Anonyme

Lampsa Hellenic Hotels

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lampsa Hellenic Hotels are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Lampsa Hellenic is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Flexopack Socit Anonyme

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Lampsa Hellenic and Flexopack Socit

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

The idea behind Lampsa Hellenic Hotels and Flexopack Socit Anonyme 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.