Correlation Between Mytilineos and Ekter SA

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

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

Diversification Opportunities for Mytilineos and Ekter SA

0.77

Correlation Coefficient

Mytilineos  Ekter SA

Poor diversification

The 3 months correlation between Mytilineos and Ekter is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mytilineos SA and Ekter SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekter SA 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 Ekter SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekter SA has no effect on the direction of Mytilineos i.e., Mytilineos and Ekter SA go up and down completely randomly.

Pair Corralation between Mytilineos and Ekter SA

Assuming the 90 days trading horizon Mytilineos SA is expected to generate 0.74 times more return on investment than Ekter SA. However, Mytilineos SA is 1.35 times less risky than Ekter SA. It trades about 0.15 of its potential returns per unit of risk. Ekter SA is currently generating about -0.12 per unit of risk. If you would invest  3,318  in Mytilineos SA on October 24, 2024 and sell it today you would earn a total of  112.00  from holding Mytilineos SA or generate 3.38% return on investment over 90 days.

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

Mytilineos SA  vs.  Ekter SA

Mytilineos SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mytilineos SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Mytilineos is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Ekter SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ekter SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ekter SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mytilineos and Ekter SA

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

The idea behind Mytilineos SA and Ekter 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.