Correlation Between Lampsa Hellenic and Mytilineos

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

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

Diversification Opportunities for Lampsa Hellenic and Mytilineos

0.23

Correlation Coefficient

Lampsa Hellenic  Mytilineos

Modest diversification

The 3 months correlation between Lampsa and Mytilineos is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lampsa Hellenic Hotels and Mytilineos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mytilineos SA and Lampsa Hellenic 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 Lampsa Hellenic Hotels 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 Lampsa Hellenic i.e., Lampsa Hellenic and Mytilineos go up and down completely randomly.

Pair Corralation between Lampsa Hellenic and Mytilineos

Assuming the 90 days trading horizon Lampsa Hellenic Hotels is expected to generate 0.59 times more return on investment than Mytilineos. However, Lampsa Hellenic Hotels is 1.68 times less risky than Mytilineos. It trades about 0.09 of its potential returns per unit of risk. Mytilineos SA is currently generating about -0.29 per unit of risk. If you would invest  3,600  in Lampsa Hellenic Hotels on March 22, 2024 and sell it today you would earn a total of  60.00  from holding Lampsa Hellenic Hotels or generate 1.67% return on investment over 90 days.

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

Lampsa Hellenic Hotels  vs.  Mytilineos SA

Lampsa Hellenic Hotels

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lampsa Hellenic Hotels are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Lampsa Hellenic sustained solid returns over the last few months and may actually be approaching a breakup point.

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 essential indicators, Mytilineos is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lampsa Hellenic and Mytilineos

The main advantage of trading using opposite Lampsa Hellenic and Mytilineos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lampsa Hellenic 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.

The idea behind Lampsa Hellenic Hotels and Mytilineos 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.