Correlation Between PCCW and Hellenic Telecommunicatio

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

By analyzing existing cross correlation between PCCW Limited and Hellenic Telecommunications Org, you can compare the effects of market volatilities on PCCW and Hellenic Telecommunicatio 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 PCCW with a short position of Hellenic Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCCW and Hellenic Telecommunicatio.

Diversification Opportunities for PCCW and Hellenic Telecommunicatio

0.0

Correlation Coefficient

PCCW  Hellenic Telecommunicatio

Pay attention - limited upside

The 3 months correlation between PCCW and Hellenic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PCCW Limited and Hellenic Telecommunications Or in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hellenic Telecommunicatio and PCCW 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 PCCW Limited are associated (or correlated) with Hellenic Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hellenic Telecommunicatio has no effect on the direction of PCCW i.e., PCCW and Hellenic Telecommunicatio go up and down completely randomly.

Pair Corralation between PCCW and Hellenic Telecommunicatio

If you would invest  55.00  in PCCW Limited on September 27, 2024 and sell it today you would earn a total of  1.00  from holding PCCW Limited or generate 1.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PCCW Limited  vs.  Hellenic Telecommunications Or

PCCW Limited

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PCCW Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, PCCW is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Hellenic Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hellenic Telecommunications Org has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Hellenic Telecommunicatio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PCCW and Hellenic Telecommunicatio

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

The idea behind PCCW Limited and Hellenic Telecommunications Org 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.