Correlation Between Mathios Refractories and Iktinos Hellas

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

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

Diversification Opportunities for Mathios Refractories and Iktinos Hellas

0.26

Correlation Coefficient

Mathios Refractories  Iktinos Hellas

Modest diversification

The 3 months correlation between Mathios and Iktinos is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mathios Refractories SA and Iktinos Hellas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iktinos Hellas SA and Mathios Refractories 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 Mathios Refractories SA are associated (or correlated) with Iktinos Hellas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iktinos Hellas SA has no effect on the direction of Mathios Refractories i.e., Mathios Refractories and Iktinos Hellas go up and down completely randomly.

Pair Corralation between Mathios Refractories and Iktinos Hellas

Assuming the 90 days trading horizon Mathios Refractories SA is expected to under-perform the Iktinos Hellas. But the stock apears to be less risky and, when comparing its historical volatility, Mathios Refractories SA is 1.68 times less risky than Iktinos Hellas. The stock trades about -0.15 of its potential returns per unit of risk. The Iktinos Hellas SA is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Iktinos Hellas SA on September 13, 2024 and sell it today you would lose (4.00) from holding Iktinos Hellas SA or give up 11.11% of portfolio value over 90 days.

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

Mathios Refractories SA  vs.  Iktinos Hellas SA

Mathios Refractories

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mathios Refractories SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain 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.

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 latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Mathios Refractories and Iktinos Hellas

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

The idea behind Mathios Refractories SA and Iktinos Hellas 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.