Correlation Between Hellenic Telecommunicatio and Marfin Investment

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

Diversification Opportunities for Hellenic Telecommunicatio and Marfin Investment

0.57

Correlation Coefficient

Hellenic Telecommunicatio  Marfin Investment

Very weak diversification

The 3 months correlation between Hellenic and Marfin is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Telecommunications Or and Marfin Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfin Investment 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 Marfin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfin Investment has no effect on the direction of Hellenic Telecommunicatio i.e., Hellenic Telecommunicatio and Marfin Investment go up and down completely randomly.

Pair Corralation between Hellenic Telecommunicatio and Marfin Investment

Assuming the 90 days trading horizon Hellenic Telecommunications Organization is expected to generate 0.79 times more return on investment than Marfin Investment. However, Hellenic Telecommunications Organization is 1.27 times less risky than Marfin Investment. It trades about 0.03 of its potential returns per unit of risk. Marfin Investment Group is currently generating about -0.08 per unit of risk. If you would invest  1,381  in Hellenic Telecommunications Organization on October 25, 2024 and sell it today you would earn a total of  102.00  from holding Hellenic Telecommunications Organization or generate 7.39% return on investment over 90 days.

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

Hellenic Telecommunications Or  vs.  Marfin Investment Group

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Marfin Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marfin Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Hellenic Telecommunicatio and Marfin Investment

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

The idea behind Hellenic Telecommunications Organization and Marfin Investment Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.