Correlation Between GEK TERNA and Athens Water

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

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

Diversification Opportunities for GEK TERNA and Athens Water

0.25

Correlation Coefficient

GEK TERNA  Athens Water

Modest diversification

The 3 months correlation between GEK and Athens is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding GEK TERNA Holdings 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 GEK TERNA 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 GEK TERNA Holdings 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 GEK TERNA i.e., GEK TERNA and Athens Water go up and down completely randomly.

Pair Corralation between GEK TERNA and Athens Water

Assuming the 90 days trading horizon GEK TERNA Holdings is expected to generate 1.07 times more return on investment than Athens Water. However, GEK TERNA is 1.07 times more volatile than Athens Water Supply. It trades about 0.07 of its potential returns per unit of risk. Athens Water Supply is currently generating about -0.01 per unit of risk. If you would invest  1,355  in GEK TERNA Holdings on April 24, 2025 and sell it today you would earn a total of  755.00  from holding GEK TERNA Holdings or generate 55.72% return on investment over 90 days.

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

GEK TERNA Holdings  vs.  Athens Water Supply

GEK TERNA Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GEK TERNA Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, GEK TERNA displayed solid returns over the last few months and may actually be approaching a breakup point.

Athens Water Supply

Risk-Adjusted Performance

Very Weak

Over the last 90 days Athens Water Supply has generated negative risk-adjusted returns adding no value to investors with long positions. 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 GEK TERNA and Athens Water

The main advantage of trading using opposite GEK TERNA and Athens Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEK TERNA 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 GEK TERNA Holdings 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.