Correlation Between Greek Organization and Terna Energy

Can any of the company-specific risk be diversified away by investing in both Greek Organization 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 Greek Organization and Terna Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Greek Organization of and Terna Energy Societe, you can compare the effects of market volatilities on Greek Organization 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 Greek Organization with a short position of Terna Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greek Organization and Terna Energy.

Diversification Opportunities for Greek Organization and Terna Energy

0.54

Correlation Coefficient

Greek Organization  Terna Energy

Very weak diversification

The 3 months correlation between Greek and Terna is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Greek Organization of 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 Greek Organization 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 Greek Organization of 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 Greek Organization i.e., Greek Organization and Terna Energy go up and down completely randomly.

Pair Corralation between Greek Organization and Terna Energy

Assuming the 90 days trading horizon Greek Organization of is expected to under-perform the Terna Energy. In addition to that, Greek Organization is 3.33 times more volatile than Terna Energy Societe. It trades about -0.07 of its total potential returns per unit of risk. Terna Energy Societe is currently generating about 0.22 per unit of volatility. If you would invest  1,981  in Terna Energy Societe on October 9, 2024 and sell it today you would earn a total of  23.00  from holding Terna Energy Societe or generate 1.16% return on investment over 90 days.

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

Greek Organization of  vs.  Terna Energy Societe

Greek Organization

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Greek Organization of are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Greek Organization is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Terna Energy Societe

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Terna Energy Societe are ranked lower than 15 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Greek Organization and Terna Energy

The main advantage of trading using opposite Greek Organization and Terna Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greek Organization 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 Greek Organization of 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.