Correlation Between Mytilineos and Cenergy Holdings

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

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

Diversification Opportunities for Mytilineos and Cenergy Holdings

-0.22

Correlation Coefficient

Mytilineos  Cenergy Holdings

Very good diversification

The 3 months correlation between Mytilineos and Cenergy is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mytilineos SA and Cenergy Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenergy Holdings and Mytilineos 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 Mytilineos SA are associated (or correlated) with Cenergy Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenergy Holdings has no effect on the direction of Mytilineos i.e., Mytilineos and Cenergy Holdings go up and down completely randomly.

Pair Corralation between Mytilineos and Cenergy Holdings

Assuming the 90 days trading horizon Mytilineos SA is expected to generate 1.07 times more return on investment than Cenergy Holdings. However, Mytilineos is 1.07 times more volatile than Cenergy Holdings SA. It trades about 0.27 of its potential returns per unit of risk. Cenergy Holdings SA is currently generating about 0.03 per unit of risk. If you would invest  3,314  in Mytilineos SA on December 30, 2024 and sell it today you would earn a total of  986.00  from holding Mytilineos SA or generate 29.75% return on investment over 90 days.

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

Mytilineos SA  vs.  Cenergy Holdings SA

Mytilineos SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mytilineos SA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Mytilineos sustained solid returns over the last few months and may actually be approaching a breakup point.

Cenergy Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cenergy Holdings SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Cenergy Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mytilineos and Cenergy Holdings

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

The idea behind Mytilineos SA and Cenergy Holdings 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.