Correlation Between National Bank and Mytilineos

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

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

Diversification Opportunities for National Bank and Mytilineos

0.78

Correlation Coefficient

National Bank  Mytilineos

Poor diversification

The 3 months correlation between National and Mytilineos is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Mytilineos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mytilineos SA and National Bank 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 National Bank of are associated (or correlated) with Mytilineos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mytilineos SA has no effect on the direction of National Bank i.e., National Bank and Mytilineos go up and down completely randomly.

Pair Corralation between National Bank and Mytilineos

Assuming the 90 days trading horizon National Bank of is expected to under-perform the Mytilineos. In addition to that, National Bank is 1.17 times more volatile than Mytilineos SA. It trades about -0.09 of its total potential returns per unit of risk. Mytilineos SA is currently generating about -0.04 per unit of volatility. If you would invest  3,380  in Mytilineos SA on September 4, 2024 and sell it today you would lose (158.00) from holding Mytilineos SA or give up 4.67% of portfolio value over 90 days.

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

National Bank of  vs.  Mytilineos SA

National Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Mytilineos SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mytilineos SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Mytilineos is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with National Bank and Mytilineos

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

The idea behind National Bank of and Mytilineos SA 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.