Correlation Between Elton International and Piraeus Port

Can any of the company-specific risk be diversified away by investing in both Elton International and Piraeus Port 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 Elton International and Piraeus Port into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Elton International Trading and Piraeus Port Authority, you can compare the effects of market volatilities on Elton International and Piraeus Port 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 Elton International with a short position of Piraeus Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elton International and Piraeus Port.

Diversification Opportunities for Elton International and Piraeus Port

0.91

Correlation Coefficient

Elton International  Piraeus Port

Almost no diversification

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

Pair Corralation between Elton International and Piraeus Port

Assuming the 90 days trading horizon Elton International Trading is expected to generate 1.01 times more return on investment than Piraeus Port. However, Elton International is 1.01 times more volatile than Piraeus Port Authority. It trades about 0.11 of its potential returns per unit of risk. Piraeus Port Authority is currently generating about 0.11 per unit of risk. If you would invest  167.00  in Elton International Trading on September 14, 2024 and sell it today you would earn a total of  18.00  from holding Elton International Trading or generate 10.78% return on investment over 90 days.

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

Elton International Trading  vs.  Piraeus Port Authority

Elton International

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elton International Trading are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Elton International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Piraeus Port Authority

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Piraeus Port Authority are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Piraeus Port may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Elton International and Piraeus Port

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

The idea behind Elton International Trading and Piraeus Port Authority 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.