Correlation Between Hellenic Petroleum and General Commercial

Can any of the company-specific risk be diversified away by investing in both Hellenic Petroleum and General Commercial 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 General Commercial 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 General Commercial Industrial, you can compare the effects of market volatilities on Hellenic Petroleum and General Commercial 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 General Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hellenic Petroleum and General Commercial.

Diversification Opportunities for Hellenic Petroleum and General Commercial

0.91

Correlation Coefficient

Hellenic Petroleum  General Commercial

Almost no diversification

The 3 months correlation between Hellenic and General is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Petroleum SA and General Commercial Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Commercial 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 General Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Commercial has no effect on the direction of Hellenic Petroleum i.e., Hellenic Petroleum and General Commercial go up and down completely randomly.

Pair Corralation between Hellenic Petroleum and General Commercial

Assuming the 90 days trading horizon Hellenic Petroleum SA is expected to generate 0.7 times more return on investment than General Commercial. However, Hellenic Petroleum SA is 1.44 times less risky than General Commercial. It trades about 0.19 of its potential returns per unit of risk. General Commercial Industrial is currently generating about 0.13 per unit of risk. If you would invest  687.00  in Hellenic Petroleum SA on December 4, 2024 and sell it today you would earn a total of  93.00  from holding Hellenic Petroleum SA or generate 13.54% return on investment over 90 days.

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

Hellenic Petroleum SA  vs.  General Commercial Industrial

Hellenic Petroleum

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hellenic Petroleum SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hellenic Petroleum unveiled solid returns over the last few months and may actually be approaching a breakup point.

General Commercial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in General Commercial Industrial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, General Commercial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hellenic Petroleum and General Commercial

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

The idea behind Hellenic Petroleum SA and General Commercial Industrial 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.