Correlation Between Athens General and BEL Small
Can any of the company-specific risk be diversified away by investing in both Athens General and BEL Small 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 Athens General and BEL Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athens General Composite and BEL Small, you can compare the effects of market volatilities on Athens General and BEL Small 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 Athens General with a short position of BEL Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athens General and BEL Small.
Diversification Opportunities for Athens General and BEL Small
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Athens and BEL is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Athens General Composite and BEL Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEL Small and Athens General 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 Athens General Composite are associated (or correlated) with BEL Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEL Small has no effect on the direction of Athens General i.e., Athens General and BEL Small go up and down completely randomly.
Pair Corralation between Athens General and BEL Small
Assuming the 90 days trading horizon Athens General Composite is expected to generate 1.28 times more return on investment than BEL Small. However, Athens General is 1.28 times more volatile than BEL Small. It trades about 0.21 of its potential returns per unit of risk. BEL Small is currently generating about -0.19 per unit of risk. If you would invest 138,638 in Athens General Composite on February 4, 2024 and sell it today you would earn a total of 6,586 from holding Athens General Composite or generate 4.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Athens General Composite vs. BEL Small
Performance |
Timeline |
Athens General and BEL Small Volatility Contrast
Predicted Return Density |
Returns |
Athens General Composite
Pair trading matchups for Athens General
BEL Small
Pair trading matchups for BEL Small
Pair Trading with Athens General and BEL Small
The main advantage of trading using opposite Athens General and BEL Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athens General position performs unexpectedly, BEL Small 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 BEL Small will offset losses from the drop in BEL Small's long position.Athens General vs. Foodlink AE | Athens General vs. Eurobank Ergasias Services | Athens General vs. Bank of Greece | Athens General vs. Performance Technologies SA |
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Check out your portfolio center.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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