Correlation Between Mytilineos and Autohellas

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

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

Diversification Opportunities for Mytilineos and Autohellas

0.6

Correlation Coefficient

Mytilineos  Autohellas

Poor diversification

The 3 months correlation between Mytilineos and Autohellas is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mytilineos SA and Autohellas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohellas 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 Autohellas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohellas SA has no effect on the direction of Mytilineos i.e., Mytilineos and Autohellas go up and down completely randomly.

Pair Corralation between Mytilineos and Autohellas

Assuming the 90 days trading horizon Mytilineos SA is expected to generate 1.16 times more return on investment than Autohellas. However, Mytilineos is 1.16 times more volatile than Autohellas SA. It trades about -0.1 of its potential returns per unit of risk. Autohellas SA is currently generating about -0.12 per unit of risk. If you would invest  3,432  in Mytilineos SA on September 5, 2024 and sell it today you would lose (322.00) from holding Mytilineos SA or give up 9.38% of portfolio value over 90 days.

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

Mytilineos SA  vs.  Autohellas SA

Mytilineos SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mytilineos SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Autohellas SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autohellas SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Mytilineos and Autohellas

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

The idea behind Mytilineos SA and Autohellas 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 Transaction History module to view history of all your transactions and understand their impact on performance.