Correlation Between EL D and Iktinos Hellas

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

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

Diversification Opportunities for EL D and Iktinos Hellas

0.27

Correlation Coefficient

EL D  Iktinos Hellas

Modest diversification

The 3 months correlation between MOYZK and Iktinos is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding EL D Mouzakis 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 EL D 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 EL D Mouzakis 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 EL D i.e., EL D and Iktinos Hellas go up and down completely randomly.

Pair Corralation between EL D and Iktinos Hellas

Assuming the 90 days trading horizon EL D Mouzakis is expected to generate 0.74 times more return on investment than Iktinos Hellas. However, EL D Mouzakis is 1.34 times less risky than Iktinos Hellas. It trades about -0.02 of its potential returns per unit of risk. Iktinos Hellas SA is currently generating about -0.04 per unit of risk. If you would invest  66.00  in EL D Mouzakis on September 13, 2024 and sell it today you would lose (3.00) from holding EL D Mouzakis or give up 4.55% of portfolio value over 90 days.

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

EL D Mouzakis  vs.  Iktinos Hellas SA

EL D Mouzakis

Risk-Adjusted Performance

0 of 100

Very Weak

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

The main advantage of trading using opposite EL D and Iktinos Hellas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EL D 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 EL D Mouzakis 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.