Correlation Between Iktinos Hellas and Lanakam SA

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

Diversification Opportunities for Iktinos Hellas and Lanakam SA

0.04

Correlation Coefficient

Iktinos Hellas  Lanakam SA

Significant diversification

The 3 months correlation between Iktinos and Lanakam is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Iktinos Hellas SA and Lanakam SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanakam SA 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 Lanakam SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanakam SA has no effect on the direction of Iktinos Hellas i.e., Iktinos Hellas and Lanakam SA go up and down completely randomly.

Pair Corralation between Iktinos Hellas and Lanakam SA

Assuming the 90 days trading horizon Iktinos Hellas SA is expected to under-perform the Lanakam SA. In addition to that, Iktinos Hellas is 1.34 times more volatile than Lanakam SA. It trades about -0.03 of its total potential returns per unit of risk. Lanakam SA is currently generating about 0.01 per unit of volatility. If you would invest  90.00  in Lanakam SA on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Lanakam SA or generate 0.0% return on investment over 90 days.

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

Iktinos Hellas SA  vs.  Lanakam 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 somewhat strong basic indicators, Iktinos Hellas is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Lanakam SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lanakam SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Lanakam SA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Iktinos Hellas and Lanakam SA

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

The idea behind Iktinos Hellas SA and Lanakam 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.