Correlation Between Autohellas and Black Diamond

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

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

Diversification Opportunities for Autohellas and Black Diamond

0.0

Correlation Coefficient

Autohellas  Black Diamond

Pay attention - limited upside

The 3 months correlation between Autohellas and Black is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Autohellas SA and Black Diamond Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Diamond Group and Autohellas 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 Autohellas SA are associated (or correlated) with Black Diamond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Diamond Group has no effect on the direction of Autohellas i.e., Autohellas and Black Diamond go up and down completely randomly.

Pair Corralation between Autohellas and Black Diamond

Assuming the 90 days horizon Autohellas SA is expected to generate 0.77 times more return on investment than Black Diamond. However, Autohellas SA is 1.3 times less risky than Black Diamond. It trades about 0.06 of its potential returns per unit of risk. Black Diamond Group is currently generating about 0.03 per unit of risk. If you would invest  293.00  in Autohellas SA on October 3, 2024 and sell it today you would earn a total of  70.00  from holding Autohellas SA or generate 23.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	80.22%
Values	Daily Returns

Autohellas SA  vs.  Black Diamond Group

Autohellas SA

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Autohellas SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Autohellas is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Black Diamond Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Black Diamond Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Autohellas and Black Diamond

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

The idea behind Autohellas SA and Black Diamond 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.