Correlation Between Interlife General and IKloukinas ILappas

Can any of the company-specific risk be diversified away by investing in both Interlife General and IKloukinas ILappas 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 Interlife General and IKloukinas ILappas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Interlife General Insurance and IKloukinas ILappas SA, you can compare the effects of market volatilities on Interlife General and IKloukinas ILappas 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 Interlife General with a short position of IKloukinas ILappas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interlife General and IKloukinas ILappas.

Diversification Opportunities for Interlife General and IKloukinas ILappas

0.21

Correlation Coefficient

Interlife General  IKloukinas ILappas

Modest diversification

The 3 months correlation between Interlife and IKloukinas is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Interlife General Insurance and IKloukinas ILappas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IKloukinas ILappas and Interlife General 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 Interlife General Insurance are associated (or correlated) with IKloukinas ILappas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IKloukinas ILappas has no effect on the direction of Interlife General i.e., Interlife General and IKloukinas ILappas go up and down completely randomly.

Pair Corralation between Interlife General and IKloukinas ILappas

Assuming the 90 days trading horizon Interlife General Insurance is expected to generate 1.59 times more return on investment than IKloukinas ILappas. However, Interlife General is 1.59 times more volatile than IKloukinas ILappas SA. It trades about 0.22 of its potential returns per unit of risk. IKloukinas ILappas SA is currently generating about -0.12 per unit of risk. If you would invest  444.00  in Interlife General Insurance on October 9, 2024 and sell it today you would earn a total of  25.00  from holding Interlife General Insurance or generate 5.63% return on investment over 90 days.

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

Interlife General Insurance  vs.  IKloukinas ILappas SA

Interlife General

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Interlife General Insurance are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Interlife General may actually be approaching a critical reversion point that can send shares even higher in February 2025.

IKloukinas ILappas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IKloukinas ILappas SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, IKloukinas ILappas is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Interlife General and IKloukinas ILappas

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

The idea behind Interlife General Insurance and IKloukinas ILappas 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.