Correlation Between MYT Netherlands and Mader Group

Can any of the company-specific risk be diversified away by investing in both MYT Netherlands and Mader Group 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 Mader Group 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 Mader Group Limited, you can compare the effects of market volatilities on MYT Netherlands and Mader Group 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 Mader Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYT Netherlands and Mader Group.

Diversification Opportunities for MYT Netherlands and Mader Group

-0.17

Correlation Coefficient

MYT Netherlands  Mader Group

Good diversification

The 3 months correlation between MYT and Mader is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent and Mader Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mader Group Limited 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 Mader Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mader Group Limited has no effect on the direction of MYT Netherlands i.e., MYT Netherlands and Mader Group go up and down completely randomly.

Pair Corralation between MYT Netherlands and Mader Group

Given the investment horizon of 90 days MYT Netherlands is expected to generate 1.15 times less return on investment than Mader Group. In addition to that, MYT Netherlands is 1.91 times more volatile than Mader Group Limited. It trades about 0.02 of its total potential returns per unit of risk. Mader Group Limited is currently generating about 0.04 per unit of volatility. If you would invest  249.00  in Mader Group Limited on October 23, 2024 and sell it today you would earn a total of  108.00  from holding Mader Group Limited or generate 43.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

MYT Netherlands Parent  vs.  Mader Group Limited

MYT Netherlands Parent

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MYT Netherlands Parent are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, MYT Netherlands exhibited solid returns over the last few months and may actually be approaching a breakup point.

Mader Group Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with MYT Netherlands and Mader Group

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

The idea behind MYT Netherlands Parent and Mader Group Limited 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.

Check out your portfolio center.

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 CEOs Directory module to screen CEOs from public companies around the world.