Correlation Between EL D and Thessaloniki Port

Can any of the company-specific risk be diversified away by investing in both EL D and Thessaloniki Port 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 Thessaloniki Port 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 Thessaloniki Port Authority, you can compare the effects of market volatilities on EL D and Thessaloniki Port 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 Thessaloniki Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of EL D and Thessaloniki Port.

Diversification Opportunities for EL D and Thessaloniki Port

0.27

Correlation Coefficient

EL D  Thessaloniki Port

Modest diversification

The 3 months correlation between MOYZK and Thessaloniki is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding EL D Mouzakis and Thessaloniki Port Authority in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thessaloniki Port 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 Thessaloniki Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thessaloniki Port has no effect on the direction of EL D i.e., EL D and Thessaloniki Port go up and down completely randomly.

Pair Corralation between EL D and Thessaloniki Port

Assuming the 90 days trading horizon EL D is expected to generate 3.19 times less return on investment than Thessaloniki Port. But when comparing it to its historical volatility, EL D Mouzakis is 1.48 times less risky than Thessaloniki Port. It trades about 0.19 of its potential returns per unit of risk. Thessaloniki Port Authority is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  2,200  in Thessaloniki Port Authority on October 25, 2024 and sell it today you would earn a total of  640.00  from holding Thessaloniki Port Authority or generate 29.09% return on investment over 90 days.

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

EL D Mouzakis  vs.  Thessaloniki Port Authority

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 newest stock price disturbance, may contribute to short-term losses for the investors.

Thessaloniki Port

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thessaloniki Port Authority are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Thessaloniki Port unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EL D and Thessaloniki Port

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

The idea behind EL D Mouzakis and Thessaloniki Port Authority 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..