Correlation Between Hellenic Telecommunicatio and Intracom Constructions

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

Diversification Opportunities for Hellenic Telecommunicatio and Intracom Constructions

-0.37

Correlation Coefficient

Hellenic Telecommunicatio  Intracom Constructions

Very good diversification

The 3 months correlation between Hellenic and Intracom is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Telecommunications Or 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 Telecommunicatio 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 Telecommunications Organization 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 Telecommunicatio i.e., Hellenic Telecommunicatio and Intracom Constructions go up and down completely randomly.

Pair Corralation between Hellenic Telecommunicatio and Intracom Constructions

Assuming the 90 days trading horizon Hellenic Telecommunications Organization is expected to under-perform the Intracom Constructions. In addition to that, Hellenic Telecommunicatio is 1.28 times more volatile than Intracom Constructions Societe. It trades about -0.06 of its total potential returns per unit of risk. Intracom Constructions Societe is currently generating about -0.04 per unit of volatility. If you would invest  485.00  in Intracom Constructions Societe on September 4, 2024 and sell it today you would lose (5.00) from holding Intracom Constructions Societe or give up 1.03% of portfolio value over 90 days.

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

Hellenic Telecommunications Or  vs.  Intracom Constructions Societe

Hellenic Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hellenic Telecommunications Organization has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Hellenic Telecommunicatio 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 Telecommunicatio and Intracom Constructions

The main advantage of trading using opposite Hellenic Telecommunicatio and Intracom Constructions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hellenic Telecommunicatio 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 Telecommunications Organization 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.