Correlation Between Thessaloniki Port and Alumil Aluminium

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

By analyzing existing cross correlation between Thessaloniki Port Authority and Alumil Aluminium Industry, you can compare the effects of market volatilities on Thessaloniki Port and Alumil Aluminium 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 Thessaloniki Port with a short position of Alumil Aluminium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thessaloniki Port and Alumil Aluminium.

Diversification Opportunities for Thessaloniki Port and Alumil Aluminium

-0.42

Correlation Coefficient

Thessaloniki Port  Alumil Aluminium

Very good diversification

The 3 months correlation between Thessaloniki and Alumil is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Thessaloniki Port Authority and Alumil Aluminium Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumil Aluminium Industry and Thessaloniki Port 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 Thessaloniki Port Authority are associated (or correlated) with Alumil Aluminium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumil Aluminium Industry has no effect on the direction of Thessaloniki Port i.e., Thessaloniki Port and Alumil Aluminium go up and down completely randomly.

Pair Corralation between Thessaloniki Port and Alumil Aluminium

Assuming the 90 days trading horizon Thessaloniki Port Authority is expected to under-perform the Alumil Aluminium. But the stock apears to be less risky and, when comparing its historical volatility, Thessaloniki Port Authority is 1.88 times less risky than Alumil Aluminium. The stock trades about -0.05 of its potential returns per unit of risk. The Alumil Aluminium Industry is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  261.00  in Alumil Aluminium Industry on February 7, 2024 and sell it today you would earn a total of  19.00  from holding Alumil Aluminium Industry or generate 7.28% return on investment over 90 days.

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

Thessaloniki Port Authority  vs.  Alumil Aluminium Industry

Thessaloniki Port

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thessaloniki Port Authority are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Thessaloniki Port is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Alumil Aluminium Industry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alumil Aluminium Industry has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Alumil Aluminium is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Thessaloniki Port and Alumil Aluminium

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

The idea behind Thessaloniki Port Authority and Alumil Aluminium Industry 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.