Correlation Between MYT Netherlands and SAG Holdings

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

Diversification Opportunities for MYT Netherlands and SAG Holdings

0.07

Correlation Coefficient

MYT Netherlands  SAG Holdings

Significant diversification

The 3 months correlation between MYT and SAG is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent and SAG Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAG Holdings 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 SAG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAG Holdings Limited has no effect on the direction of MYT Netherlands i.e., MYT Netherlands and SAG Holdings go up and down completely randomly.

Pair Corralation between MYT Netherlands and SAG Holdings

Given the investment horizon of 90 days MYT Netherlands Parent is expected to generate 0.72 times more return on investment than SAG Holdings. However, MYT Netherlands Parent is 1.39 times less risky than SAG Holdings. It trades about 0.21 of its potential returns per unit of risk. SAG Holdings Limited is currently generating about 0.04 per unit of risk. If you would invest  643.00  in MYT Netherlands Parent on October 9, 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	100.0%
Values	Daily Returns

MYT Netherlands Parent  vs.  SAG Holdings Limited

MYT Netherlands Parent

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MYT Netherlands Parent are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

SAG Holdings Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAG Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with MYT Netherlands and SAG Holdings

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

The idea behind MYT Netherlands Parent and SAG Holdings 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.

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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.