Correlation Between Centric Holdings and Mytilineos
Can any of the company-specific risk be diversified away by investing in both Centric Holdings and Mytilineos 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 Centric Holdings and Mytilineos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centric Holdings SA and Mytilineos SA, you can compare the effects of market volatilities on Centric Holdings and Mytilineos 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 Centric Holdings with a short position of Mytilineos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centric Holdings and Mytilineos.
Diversification Opportunities for Centric Holdings and Mytilineos
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Centric and Mytilineos is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Centric Holdings SA and Mytilineos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mytilineos SA and Centric Holdings 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 Centric Holdings SA are associated (or correlated) with Mytilineos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mytilineos SA has no effect on the direction of Centric Holdings i.e., Centric Holdings and Mytilineos go up and down completely randomly.
Pair Corralation between Centric Holdings and Mytilineos
Assuming the 90 days trading horizon Centric Holdings SA is expected to generate 1.39 times more return on investment than Mytilineos. However, Centric Holdings is 1.39 times more volatile than Mytilineos SA. It trades about 0.02 of its potential returns per unit of risk. Mytilineos SA is currently generating about 0.02 per unit of risk. If you would invest 31.00 in Centric Holdings SA on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Centric Holdings SA or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centric Holdings SA vs. Mytilineos SA
Performance |
| Timeline |
| Centric Holdings |
| Mytilineos SA |
Centric Holdings and Mytilineos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centric Holdings and Mytilineos
The main advantage of trading using opposite Centric Holdings and Mytilineos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centric Holdings position performs unexpectedly, Mytilineos 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 Mytilineos will offset losses from the drop in Mytilineos' long position.| Centric Holdings vs. Intralot SA Integrated | Centric Holdings vs. As Commercial Industrial | Centric Holdings vs. BriQ Properties Real | Centric Holdings vs. Trastor Real Estate |
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Check out your portfolio center.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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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