Correlation Between MYT Netherlands and Blue Capital

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

By analyzing existing cross correlation between MYT Netherlands Parent and Blue Capital Reinsurance, you can compare the effects of market volatilities on MYT Netherlands and Blue Capital 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 MYT Netherlands with a short position of Blue Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYT Netherlands and Blue Capital.

Diversification Opportunities for MYT Netherlands and Blue Capital

0.03

Correlation Coefficient

MYT Netherlands  Blue Capital

Significant diversification

The 3 months correlation between MYT and Blue is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent and Blue Capital Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Capital Reinsurance and MYT Netherlands 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 MYT Netherlands Parent are associated (or correlated) with Blue Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Capital Reinsurance has no effect on the direction of MYT Netherlands i.e., MYT Netherlands and Blue Capital go up and down completely randomly.

Pair Corralation between MYT Netherlands and Blue Capital

If you would invest  643.00  in MYT Netherlands Parent on October 8, 2024 and sell it today you would earn a total of  106.00  from holding MYT Netherlands Parent or generate 16.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

MYT Netherlands Parent  vs.  Blue Capital Reinsurance

MYT Netherlands Parent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MYT Netherlands Parent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, MYT Netherlands is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Blue Capital Reinsurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Capital Reinsurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Blue Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MYT Netherlands and Blue Capital

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

The idea behind MYT Netherlands Parent and Blue Capital Reinsurance 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.