Correlation Between Hellenic Petroleum and GEK TERNA

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

Diversification Opportunities for Hellenic Petroleum and GEK TERNA

0.09

Correlation Coefficient

Hellenic Petroleum  GEK TERNA

Significant diversification

The 3 months correlation between Hellenic and GEK is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Petroleum SA and GEK TERNA Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEK TERNA Holdings 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 GEK TERNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEK TERNA Holdings has no effect on the direction of Hellenic Petroleum i.e., Hellenic Petroleum and GEK TERNA go up and down completely randomly.

Pair Corralation between Hellenic Petroleum and GEK TERNA

Assuming the 90 days trading horizon Hellenic Petroleum is expected to generate 8.5 times less return on investment than GEK TERNA. In addition to that, Hellenic Petroleum is 1.25 times more volatile than GEK TERNA Holdings. It trades about 0.01 of its total potential returns per unit of risk. GEK TERNA Holdings is currently generating about 0.12 per unit of volatility. If you would invest  1,728  in GEK TERNA Holdings on September 14, 2024 and sell it today you would earn a total of  118.00  from holding GEK TERNA Holdings or generate 6.83% return on investment over 90 days.

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

Hellenic Petroleum SA  vs.  GEK TERNA Holdings

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.

GEK TERNA Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GEK TERNA Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, GEK TERNA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hellenic Petroleum and GEK TERNA

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

The idea behind Hellenic Petroleum SA and GEK TERNA Holdings 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.