Correlation Between Lampsa Hellenic and Public Power

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

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

Diversification Opportunities for Lampsa Hellenic and Public Power

-0.6

Correlation Coefficient

Lampsa Hellenic  Public Power

Excellent diversification

The 3 months correlation between Lampsa and Public is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lampsa Hellenic Hotels and Public Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Power and Lampsa Hellenic 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 Lampsa Hellenic Hotels are associated (or correlated) with Public Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Power has no effect on the direction of Lampsa Hellenic i.e., Lampsa Hellenic and Public Power go up and down completely randomly.

Pair Corralation between Lampsa Hellenic and Public Power

Assuming the 90 days trading horizon Lampsa Hellenic Hotels is expected to under-perform the Public Power. But the stock apears to be less risky and, when comparing its historical volatility, Lampsa Hellenic Hotels is 1.94 times less risky than Public Power. The stock trades about -0.04 of its potential returns per unit of risk. The Public Power is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,163  in Public Power on December 3, 2024 and sell it today you would earn a total of  159.00  from holding Public Power or generate 13.67% return on investment over 90 days.

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

Lampsa Hellenic Hotels  vs.  Public Power

Lampsa Hellenic Hotels

Risk-Adjusted Performance

Very Weak

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

Public Power

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Public Power are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Public Power unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lampsa Hellenic and Public Power

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

The idea behind Lampsa Hellenic Hotels and Public Power 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.