Correlation Between Deceuninck and Mytilineos
Can any of the company-specific risk be diversified away by investing in both Deceuninck 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 Deceuninck and Mytilineos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deceuninck and Mytilineos SA, you can compare the effects of market volatilities on Deceuninck 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 Deceuninck with a short position of Mytilineos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deceuninck and Mytilineos.
Diversification Opportunities for Deceuninck and Mytilineos
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deceuninck and Mytilineos is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Deceuninck and Mytilineos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mytilineos SA and Deceuninck 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 Deceuninck 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 Deceuninck i.e., Deceuninck and Mytilineos go up and down completely randomly.
Pair Corralation between Deceuninck and Mytilineos
Assuming the 90 days trading horizon Deceuninck is expected to generate 0.87 times more return on investment than Mytilineos. However, Deceuninck is 1.15 times less risky than Mytilineos. It trades about -0.02 of its potential returns per unit of risk. Mytilineos SA is currently generating about -0.09 per unit of risk. If you would invest 235.00 in Deceuninck on August 30, 2024 and sell it today you would lose (5.00) from holding Deceuninck or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Deceuninck vs. Mytilineos SA
Performance |
| Timeline |
| Deceuninck |
| Mytilineos SA |
Deceuninck and Mytilineos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deceuninck and Mytilineos
The main advantage of trading using opposite Deceuninck and Mytilineos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deceuninck 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.| Deceuninck vs. Tessenderlo | Deceuninck vs. Barco NV | Deceuninck vs. EVS Broadcast Equipment | Deceuninck vs. Exmar NV |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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