Correlation Between Mytilineos and Thessaloniki Water
Can any of the company-specific risk be diversified away by investing in both Mytilineos and Thessaloniki Water 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 Thessaloniki Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mytilineos SA and Thessaloniki Water Supply, you can compare the effects of market volatilities on Mytilineos and Thessaloniki Water 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 Thessaloniki Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mytilineos and Thessaloniki Water.
Diversification Opportunities for Mytilineos and Thessaloniki Water
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mytilineos and Thessaloniki is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mytilineos SA and Thessaloniki Water Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thessaloniki Water Supply 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 Thessaloniki Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thessaloniki Water Supply has no effect on the direction of Mytilineos i.e., Mytilineos and Thessaloniki Water go up and down completely randomly.
Pair Corralation between Mytilineos and Thessaloniki Water
Assuming the 90 days trading horizon Mytilineos SA is expected to generate 1.26 times more return on investment than Thessaloniki Water. However, Mytilineos is 1.26 times more volatile than Thessaloniki Water Supply. It trades about 0.07 of its potential returns per unit of risk. Thessaloniki Water Supply is currently generating about -0.01 per unit of risk. If you would invest 1,818 in Mytilineos SA on September 2, 2024 and sell it today you would earn a total of 1,288 from holding Mytilineos SA or generate 70.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mytilineos SA vs. Thessaloniki Water Supply
Performance |
| Timeline |
| Mytilineos SA |
| Thessaloniki Water Supply |
Mytilineos and Thessaloniki Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mytilineos and Thessaloniki Water
The main advantage of trading using opposite Mytilineos and Thessaloniki Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mytilineos position performs unexpectedly, Thessaloniki Water 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 Thessaloniki Water will offset losses from the drop in Thessaloniki Water's long position.| Mytilineos vs. Sidma SA Steel | Mytilineos vs. Hellenic Telecommunications Organization | Mytilineos vs. Technical Olympic SA | Mytilineos vs. Karelia Tobacco |
| Thessaloniki Water vs. Hellenic Petroleum SA | Thessaloniki Water vs. Mytilineos SA | Thessaloniki Water vs. Hellenic Telecommunications Organization | Thessaloniki Water vs. Public Power |
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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