Correlation Between Mytilineos and Bank of Greece

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

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

Diversification Opportunities for Mytilineos and Bank of Greece

0.36

Correlation Coefficient

Mytilineos  Bank of Greece

Weak diversification

The 3 months correlation between Mytilineos and Bank is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mytilineos SA and Bank of Greece in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Greece 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 Bank of Greece. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Greece has no effect on the direction of Mytilineos i.e., Mytilineos and Bank of Greece go up and down completely randomly.

Pair Corralation between Mytilineos and Bank of Greece

Assuming the 90 days trading horizon Mytilineos SA is expected to under-perform the Bank of Greece. In addition to that, Mytilineos is 1.45 times more volatile than Bank of Greece. It trades about -0.01 of its total potential returns per unit of risk. Bank of Greece is currently generating about 0.06 per unit of volatility. If you would invest  1,365  in Bank of Greece on September 12, 2024 and sell it today you would earn a total of  50.00  from holding Bank of Greece or generate 3.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Mytilineos SA  vs.  Bank of Greece

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 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.

Bank of Greece

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Greece are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bank of Greece is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mytilineos and Bank of Greece

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

The idea behind Mytilineos SA and Bank of Greece 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.