Correlation Between Hellenic Petroleum and Frigoglass SAIC

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

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

Diversification Opportunities for Hellenic Petroleum and Frigoglass SAIC

0.27

Correlation Coefficient

Hellenic Petroleum  Frigoglass SAIC

Modest diversification

The 3 months correlation between Hellenic and Frigoglass is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Petroleum SA and Frigoglass SAIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frigoglass SAIC and Hellenic Petroleum 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 Hellenic Petroleum SA are associated (or correlated) with Frigoglass SAIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frigoglass SAIC has no effect on the direction of Hellenic Petroleum i.e., Hellenic Petroleum and Frigoglass SAIC go up and down completely randomly.

Pair Corralation between Hellenic Petroleum and Frigoglass SAIC

Assuming the 90 days trading horizon Hellenic Petroleum is expected to generate 22.19 times less return on investment than Frigoglass SAIC. But when comparing it to its historical volatility, Hellenic Petroleum SA is 4.71 times less risky than Frigoglass SAIC. It trades about 0.01 of its potential returns per unit of risk. Frigoglass SAIC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  20.00  in Frigoglass SAIC on September 14, 2024 and sell it today you would earn a total of  2.00  from holding Frigoglass SAIC or generate 10.0% return on investment over 90 days.

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

Hellenic Petroleum SA  vs.  Frigoglass SAIC

Hellenic Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

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

Frigoglass SAIC

Risk-Adjusted Performance

4 of 100

Modest

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

Pair Trading with Hellenic Petroleum and Frigoglass SAIC

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

The idea behind Hellenic Petroleum SA and Frigoglass SAIC 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.