Correlation Between As Commercial and Autohellas

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

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

Diversification Opportunities for As Commercial and Autohellas

0.35

Correlation Coefficient

As Commercial  Autohellas

Weak diversification

The 3 months correlation between ASCO and Autohellas is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding As Commercial Industrial and Autohellas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohellas SA and As Commercial 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 As Commercial Industrial are associated (or correlated) with Autohellas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohellas SA has no effect on the direction of As Commercial i.e., As Commercial and Autohellas go up and down completely randomly.

Pair Corralation between As Commercial and Autohellas

Assuming the 90 days trading horizon As Commercial Industrial is expected to generate 0.97 times more return on investment than Autohellas. However, As Commercial Industrial is 1.03 times less risky than Autohellas. It trades about 0.06 of its potential returns per unit of risk. Autohellas SA is currently generating about 0.02 per unit of risk. If you would invest  194.00  in As Commercial Industrial on September 13, 2024 and sell it today you would earn a total of  82.00  from holding As Commercial Industrial or generate 42.27% return on investment over 90 days.

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

As Commercial Industrial  vs.  Autohellas SA

As Commercial Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days As Commercial Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, As Commercial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Autohellas SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autohellas SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with As Commercial and Autohellas

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

The idea behind As Commercial Industrial and Autohellas 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.