Correlation Between Mytilineos and Motor Oil

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

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

Diversification Opportunities for Mytilineos and Motor Oil

0.34

Correlation Coefficient

Mytilineos  Motor Oil

Weak diversification

The 3 months correlation between Mytilineos and Motor is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mytilineos SA and Motor Oil Corinth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motor Oil Corinth 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 Motor Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motor Oil Corinth has no effect on the direction of Mytilineos i.e., Mytilineos and Motor Oil go up and down completely randomly.

Pair Corralation between Mytilineos and Motor Oil

Assuming the 90 days trading horizon Mytilineos SA is expected to under-perform the Motor Oil. But the stock apears to be less risky and, when comparing its historical volatility, Mytilineos SA is 1.28 times less risky than Motor Oil. The stock trades about -0.16 of its potential returns per unit of risk. The Motor Oil Corinth is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  2,722  in Motor Oil Corinth on March 2, 2024 and sell it today you would lose (52.00) from holding Motor Oil Corinth or give up 1.91% of portfolio value over 90 days.

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

Mytilineos SA  vs.  Motor Oil Corinth

Mytilineos SA

Risk-Adjusted Performance

0 of 100

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.

Motor Oil Corinth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Motor Oil Corinth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Motor Oil 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 Motor Oil

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

The idea behind Mytilineos SA and Motor Oil Corinth 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.