Correlation Between Iktinos Hellas and Hellenic Petroleum

Can any of the company-specific risk be diversified away by investing in both Iktinos Hellas and Hellenic Petroleum 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 Iktinos Hellas and Hellenic Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Iktinos Hellas SA and Hellenic Petroleum SA, you can compare the effects of market volatilities on Iktinos Hellas and Hellenic Petroleum 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 Iktinos Hellas with a short position of Hellenic Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iktinos Hellas and Hellenic Petroleum.

Diversification Opportunities for Iktinos Hellas and Hellenic Petroleum

0.51

Correlation Coefficient

Iktinos Hellas  Hellenic Petroleum

Very weak diversification

The 3 months correlation between Iktinos and Hellenic is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Iktinos Hellas SA and Hellenic Petroleum SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hellenic Petroleum and Iktinos Hellas 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 Iktinos Hellas SA are associated (or correlated) with Hellenic Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hellenic Petroleum has no effect on the direction of Iktinos Hellas i.e., Iktinos Hellas and Hellenic Petroleum go up and down completely randomly.

Pair Corralation between Iktinos Hellas and Hellenic Petroleum

Assuming the 90 days trading horizon Iktinos Hellas SA is expected to under-perform the Hellenic Petroleum. In addition to that, Iktinos Hellas is 2.96 times more volatile than Hellenic Petroleum SA. It trades about -0.13 of its total potential returns per unit of risk. Hellenic Petroleum SA is currently generating about -0.04 per unit of volatility. If you would invest  720.00  in Hellenic Petroleum SA on September 5, 2024 and sell it today you would lose (20.00) from holding Hellenic Petroleum SA or give up 2.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Iktinos Hellas SA  vs.  Hellenic Petroleum SA

Iktinos Hellas SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iktinos Hellas SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hellenic Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hellenic Petroleum SA has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Iktinos Hellas and Hellenic Petroleum

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

The idea behind Iktinos Hellas SA and Hellenic Petroleum 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.