Correlation Between Hellenic Petroleum and IKloukinas ILappas

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

Diversification Opportunities for Hellenic Petroleum and IKloukinas ILappas

0.0

Correlation Coefficient

Hellenic Petroleum  IKloukinas ILappas

Pay attention - limited upside

The 3 months correlation between Hellenic and IKloukinas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Petroleum SA and IKloukinas ILappas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IKloukinas ILappas 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 IKloukinas ILappas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IKloukinas ILappas has no effect on the direction of Hellenic Petroleum i.e., Hellenic Petroleum and IKloukinas ILappas go up and down completely randomly.

Pair Corralation between Hellenic Petroleum and IKloukinas ILappas

Assuming the 90 days trading horizon Hellenic Petroleum is expected to generate 3.24 times less return on investment than IKloukinas ILappas. But when comparing it to its historical volatility, Hellenic Petroleum SA is 1.62 times less risky than IKloukinas ILappas. It trades about 0.05 of its potential returns per unit of risk. IKloukinas ILappas SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  58.00  in IKloukinas ILappas SA on October 10, 2024 and sell it today you would earn a total of  89.00  from holding IKloukinas ILappas SA or generate 153.45% return on investment over 90 days.

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

Hellenic Petroleum SA  vs.  IKloukinas ILappas SA

Hellenic Petroleum

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hellenic Petroleum SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hellenic Petroleum may actually be approaching a critical reversion point that can send shares even higher in February 2025.

IKloukinas ILappas

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Hellenic Petroleum and IKloukinas ILappas

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

The idea behind Hellenic Petroleum SA and IKloukinas ILappas 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.