Correlation Between MYT Netherlands and Vantage Drilling

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

Diversification Opportunities for MYT Netherlands and Vantage Drilling

-0.2

Correlation Coefficient

MYT Netherlands  Vantage Drilling

Good diversification

The 3 months correlation between MYT and Vantage is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent and Vantage Drilling International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vantage Drilling Int 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 Vantage Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vantage Drilling Int has no effect on the direction of MYT Netherlands i.e., MYT Netherlands and Vantage Drilling go up and down completely randomly.

Pair Corralation between MYT Netherlands and Vantage Drilling

If you would invest  720.00  in MYT Netherlands Parent on October 11, 2024 and sell it today you would earn a total of  27.00  from holding MYT Netherlands Parent or generate 3.75% return on investment over 90 days.

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

MYT Netherlands Parent  vs.  Vantage Drilling International

MYT Netherlands Parent

Risk-Adjusted Performance

0 of 100

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.

Vantage Drilling Int

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with MYT Netherlands and Vantage Drilling

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

The idea behind MYT Netherlands Parent and Vantage Drilling International 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.