Correlation Between Marfin Investment and Terna Energy

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

Diversification Opportunities for Marfin Investment and Terna Energy

-0.81

Correlation Coefficient

Marfin Investment  Terna Energy

Pay attention - limited upside

The 3 months correlation between Marfin and Terna is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Marfin Investment Group and Terna Energy Societe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terna Energy Societe 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 Terna Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terna Energy Societe has no effect on the direction of Marfin Investment i.e., Marfin Investment and Terna Energy go up and down completely randomly.

Pair Corralation between Marfin Investment and Terna Energy

Assuming the 90 days trading horizon Marfin Investment Group is expected to generate 3.72 times more return on investment than Terna Energy. However, Marfin Investment is 3.72 times more volatile than Terna Energy Societe. It trades about 0.06 of its potential returns per unit of risk. Terna Energy Societe is currently generating about 0.01 per unit of risk. If you would invest  126.00  in Marfin Investment Group on October 10, 2024 and sell it today you would earn a total of  170.00  from holding Marfin Investment Group or generate 134.92% return on investment over 90 days.

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

Marfin Investment Group  vs.  Terna Energy Societe

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 latest weak 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.

Terna Energy Societe

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Terna Energy Societe are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Terna Energy 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 Terna Energy

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

The idea behind Marfin Investment Group and Terna Energy Societe 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.