Correlation Between Marfin Investment and Hellenic Telecommunicatio

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

By analyzing existing cross correlation between Marfin Investment Group and Hellenic Telecommunications Organization, you can compare the effects of market volatilities on Marfin Investment and Hellenic Telecommunicatio 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 Marfin Investment with a short position of Hellenic Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfin Investment and Hellenic Telecommunicatio.

Diversification Opportunities for Marfin Investment and Hellenic Telecommunicatio

0.75

Correlation Coefficient

Marfin Investment  Hellenic Telecommunicatio

Poor diversification

The 3 months correlation between Marfin and Hellenic is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Marfin Investment Group and Hellenic Telecommunications Or in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hellenic Telecommunicatio and Marfin Investment 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 Marfin Investment Group are associated (or correlated) with Hellenic Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hellenic Telecommunicatio has no effect on the direction of Marfin Investment i.e., Marfin Investment and Hellenic Telecommunicatio go up and down completely randomly.

Pair Corralation between Marfin Investment and Hellenic Telecommunicatio

Assuming the 90 days trading horizon Marfin Investment Group is expected to generate 3.47 times more return on investment than Hellenic Telecommunicatio. However, Marfin Investment is 3.47 times more volatile than Hellenic Telecommunications Organization. It trades about 0.06 of its potential returns per unit of risk. Hellenic Telecommunications Organization is currently generating about 0.02 per unit of risk. If you would invest  128.00  in Marfin Investment Group on October 11, 2024 and sell it today you would earn a total of  175.00  from holding Marfin Investment Group or generate 136.72% return on investment over 90 days.

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

Marfin Investment Group  vs.  Hellenic Telecommunications Or

Marfin Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marfin Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Marfin Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Hellenic Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hellenic Telecommunications Organization has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Hellenic Telecommunicatio 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 Marfin Investment and Hellenic Telecommunicatio

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

The idea behind Marfin Investment Group and Hellenic Telecommunications Organization 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.