Correlation Between Daios Plastics and Athens Water

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

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

Diversification Opportunities for Daios Plastics and Athens Water

0.28

Correlation Coefficient

Daios Plastics  Athens Water

Modest diversification

The 3 months correlation between Daios and Athens is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Daios Plastics SA and Athens Water Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athens Water Supply and Daios Plastics 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 Daios Plastics SA are associated (or correlated) with Athens Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athens Water Supply has no effect on the direction of Daios Plastics i.e., Daios Plastics and Athens Water go up and down completely randomly.

Pair Corralation between Daios Plastics and Athens Water

Assuming the 90 days trading horizon Daios Plastics SA is expected to generate 3.3 times more return on investment than Athens Water. However, Daios Plastics is 3.3 times more volatile than Athens Water Supply. It trades about 0.12 of its potential returns per unit of risk. Athens Water Supply is currently generating about 0.05 per unit of risk. If you would invest  398.00  in Daios Plastics SA on April 23, 2025 and sell it today you would earn a total of  102.00  from holding Daios Plastics SA or generate 25.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Daios Plastics SA  vs.  Athens Water Supply

Daios Plastics SA

Risk-Adjusted Performance

OK

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

Athens Water Supply

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Athens Water Supply are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Athens Water is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Daios Plastics and Athens Water

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

The idea behind Daios Plastics SA and Athens Water Supply 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.