Correlation Between Interlife General and Mytilineos

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Can any of the company-specific risk be diversified away by investing in both Interlife General 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 Interlife General and Mytilineos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interlife General Insurance and Mytilineos SA, you can compare the effects of market volatilities on Interlife General 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 Interlife General with a short position of Mytilineos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interlife General and Mytilineos.

Diversification Opportunities for Interlife General and Mytilineos

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Interlife and Mytilineos is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Interlife General Insurance and Mytilineos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mytilineos SA and Interlife General 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 Interlife General Insurance 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 Interlife General i.e., Interlife General and Mytilineos go up and down completely randomly.

Pair Corralation between Interlife General and Mytilineos

Assuming the 90 days trading horizon Interlife General is expected to generate 188.63 times less return on investment than Mytilineos. But when comparing it to its historical volatility, Interlife General Insurance is 1.33 times less risky than Mytilineos. It trades about 0.0 of its potential returns per unit of risk. Mytilineos SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,456  in Mytilineos SA on March 2, 2024 and sell it today you would earn a total of  194.00  from holding Mytilineos SA or generate 5.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Interlife General Insurance  vs.  Mytilineos SA

 Performance 
       Timeline  
Interlife General 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Interlife General Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Interlife General is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Mytilineos SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.

Interlife General and Mytilineos Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Interlife General and Mytilineos

The main advantage of trading using opposite Interlife General and Mytilineos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interlife General 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 Interlife General Insurance 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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