Correlation Between Hellenic Petroleum and Intracom Constructions

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

Diversification Opportunities for Hellenic Petroleum and Intracom Constructions

0.04

Correlation Coefficient

Hellenic Petroleum  Intracom Constructions

Significant diversification

The 3 months correlation between Hellenic and Intracom is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Petroleum SA and Intracom Constructions Societe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intracom Constructions 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 Intracom Constructions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intracom Constructions has no effect on the direction of Hellenic Petroleum i.e., Hellenic Petroleum and Intracom Constructions go up and down completely randomly.

Pair Corralation between Hellenic Petroleum and Intracom Constructions

Assuming the 90 days trading horizon Hellenic Petroleum SA is expected to generate 0.89 times more return on investment than Intracom Constructions. However, Hellenic Petroleum SA is 1.13 times less risky than Intracom Constructions. It trades about 0.01 of its potential returns per unit of risk. Intracom Constructions Societe is currently generating about -0.06 per unit of risk. If you would invest  696.00  in Hellenic Petroleum SA on September 12, 2024 and sell it today you would earn a total of  4.00  from holding Hellenic Petroleum SA or generate 0.57% 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.  Intracom Constructions Societe

Hellenic Petroleum

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hellenic Petroleum SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Intracom Constructions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intracom Constructions Societe has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Intracom Constructions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hellenic Petroleum and Intracom Constructions

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

The idea behind Hellenic Petroleum SA and Intracom Constructions Societe 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.