Correlation Between Marfin Investment and Optronics Technologies

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

Diversification Opportunities for Marfin Investment and Optronics Technologies

0.0

Correlation Coefficient

Marfin Investment  Optronics Technologies

Pay attention - limited upside

The 3 months correlation between Marfin and Optronics is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marfin Investment Group and Optronics Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optronics Technologies 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 Optronics Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optronics Technologies has no effect on the direction of Marfin Investment i.e., Marfin Investment and Optronics Technologies go up and down completely randomly.

Pair Corralation between Marfin Investment and Optronics Technologies

Assuming the 90 days trading horizon Marfin Investment Group is expected to generate 2.05 times more return on investment than Optronics Technologies. However, Marfin Investment is 2.05 times more volatile than Optronics Technologies SA. It trades about 0.05 of its potential returns per unit of risk. Optronics Technologies SA is currently generating about -0.01 per unit of risk. If you would invest  134.00  in Marfin Investment Group on October 9, 2024 and sell it today you would earn a total of  164.00  from holding Marfin Investment Group or generate 122.39% return on investment over 90 days.

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

Marfin Investment Group  vs.  Optronics Technologies SA

Marfin Investment

Risk-Adjusted Performance

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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 latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Optronics Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Marfin Investment and Optronics Technologies

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

The idea behind Marfin Investment Group and Optronics Technologies 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.