Correlation Between Mytilineos and Kri Kri

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

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

Diversification Opportunities for Mytilineos and Kri Kri

0.09

Correlation Coefficient

Mytilineos  Kri Kri

Significant diversification

The 3 months correlation between Mytilineos and Kri is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mytilineos SA and Kri Kri Milk Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kri Kri Milk 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 Kri Kri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kri Kri Milk has no effect on the direction of Mytilineos i.e., Mytilineos and Kri Kri go up and down completely randomly.

Pair Corralation between Mytilineos and Kri Kri

Assuming the 90 days trading horizon Mytilineos is expected to generate 1.42 times less return on investment than Kri Kri. But when comparing it to its historical volatility, Mytilineos SA is 1.44 times less risky than Kri Kri. It trades about 0.21 of its potential returns per unit of risk. Kri Kri Milk Industry is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,530  in Kri Kri Milk Industry on October 11, 2024 and sell it today you would earn a total of  95.00  from holding Kri Kri Milk Industry or generate 6.21% return on investment over 90 days.

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

Mytilineos SA  vs.  Kri Kri Milk Industry

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 current stock price disturbance, may contribute to short-term losses for the investors.

Kri Kri Milk

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kri Kri Milk Industry are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Kri Kri unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mytilineos and Kri Kri

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

The idea behind Mytilineos SA and Kri Kri Milk Industry 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.