Correlation Between N Leventeris and Marfin Investment

Can any of the company-specific risk be diversified away by investing in both N Leventeris and Marfin Investment 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 N Leventeris and Marfin Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between N Leventeris SA and Marfin Investment Group, you can compare the effects of market volatilities on N Leventeris and Marfin Investment 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 N Leventeris with a short position of Marfin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of N Leventeris and Marfin Investment.

Diversification Opportunities for N Leventeris and Marfin Investment

-0.4

Correlation Coefficient

N Leventeris  Marfin Investment

Very good diversification

The 3 months correlation between LEBEP and Marfin is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding N Leventeris SA and Marfin Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfin Investment and N Leventeris 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 N Leventeris SA are associated (or correlated) with Marfin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfin Investment has no effect on the direction of N Leventeris i.e., N Leventeris and Marfin Investment go up and down completely randomly.

Pair Corralation between N Leventeris and Marfin Investment

Assuming the 90 days trading horizon N Leventeris SA is expected to under-perform the Marfin Investment. In addition to that, N Leventeris is 2.93 times more volatile than Marfin Investment Group. It trades about -0.13 of its total potential returns per unit of risk. Marfin Investment Group is currently generating about -0.16 per unit of volatility. If you would invest  324.00  in Marfin Investment Group on September 5, 2024 and sell it today you would lose (28.00) from holding Marfin Investment Group or give up 8.64% of portfolio value over 90 days.

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

N Leventeris SA  vs.  Marfin Investment Group

N Leventeris SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in N Leventeris SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, N Leventeris sustained solid returns over the last few months and may actually be approaching a breakup point.

Marfin Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marfin Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with N Leventeris and Marfin Investment

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

The idea behind N Leventeris SA and Marfin Investment Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.