Correlation Between Papoutsanis and Gr Sarantis

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

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

Diversification Opportunities for Papoutsanis and Gr Sarantis

0.73

Correlation Coefficient

Papoutsanis  Gr Sarantis

Poor diversification

The 3 months correlation between Papoutsanis and SAR is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Papoutsanis SA and Gr Sarantis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gr Sarantis SA and Papoutsanis 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 Papoutsanis SA are associated (or correlated) with Gr Sarantis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gr Sarantis SA has no effect on the direction of Papoutsanis i.e., Papoutsanis and Gr Sarantis go up and down completely randomly.

Pair Corralation between Papoutsanis and Gr Sarantis

Assuming the 90 days trading horizon Papoutsanis is expected to generate 1.78 times less return on investment than Gr Sarantis. But when comparing it to its historical volatility, Papoutsanis SA is 1.18 times less risky than Gr Sarantis. It trades about 0.12 of its potential returns per unit of risk. Gr Sarantis SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,066  in Gr Sarantis SA on December 28, 2024 and sell it today you would earn a total of  248.00  from holding Gr Sarantis SA or generate 23.26% return on investment over 90 days.

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

Papoutsanis SA  vs.  Gr Sarantis SA

Papoutsanis SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Papoutsanis SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Papoutsanis unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gr Sarantis SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gr Sarantis SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Gr Sarantis unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Papoutsanis and Gr Sarantis

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

The idea behind Papoutsanis SA and Gr Sarantis 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.