Correlation Between Philippos Nakas and Fourlis Holdings

Can any of the company-specific risk be diversified away by investing in both Philippos Nakas and Fourlis Holdings 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 Philippos Nakas and Fourlis Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Philippos Nakas SA and Fourlis Holdings SA, you can compare the effects of market volatilities on Philippos Nakas and Fourlis Holdings 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 Philippos Nakas with a short position of Fourlis Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippos Nakas and Fourlis Holdings.

Diversification Opportunities for Philippos Nakas and Fourlis Holdings

-0.39

Correlation Coefficient

Philippos Nakas  Fourlis Holdings

Very good diversification

The 3 months correlation between Philippos and Fourlis is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Philippos Nakas SA and Fourlis Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fourlis Holdings and Philippos Nakas 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 Philippos Nakas SA are associated (or correlated) with Fourlis Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fourlis Holdings has no effect on the direction of Philippos Nakas i.e., Philippos Nakas and Fourlis Holdings go up and down completely randomly.

Pair Corralation between Philippos Nakas and Fourlis Holdings

Assuming the 90 days trading horizon Philippos Nakas SA is expected to generate 3.55 times more return on investment than Fourlis Holdings. However, Philippos Nakas is 3.55 times more volatile than Fourlis Holdings SA. It trades about 0.05 of its potential returns per unit of risk. Fourlis Holdings SA is currently generating about -0.05 per unit of risk. If you would invest  274.00  in Philippos Nakas SA on September 15, 2024 and sell it today you would earn a total of  26.00  from holding Philippos Nakas SA or generate 9.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Philippos Nakas SA  vs.  Fourlis Holdings SA

Philippos Nakas SA

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Philippos Nakas SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Philippos Nakas sustained solid returns over the last few months and may actually be approaching a breakup point.

Fourlis Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Philippos Nakas and Fourlis Holdings

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

The idea behind Philippos Nakas SA and Fourlis Holdings SA 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..