Correlation Between Sato Office and Mytilineos

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

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

Diversification Opportunities for Sato Office and Mytilineos

-0.25

Correlation Coefficient

Sato Office  Mytilineos

Very good diversification

The 3 months correlation between Sato and Mytilineos is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sato office and and Mytilineos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mytilineos SA and Sato Office 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 Sato office and 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 Sato Office i.e., Sato Office and Mytilineos go up and down completely randomly.

Pair Corralation between Sato Office and Mytilineos

Assuming the 90 days trading horizon Sato office and is expected to under-perform the Mytilineos. In addition to that, Sato Office is 3.99 times more volatile than Mytilineos SA. It trades about -0.27 of its total potential returns per unit of risk. Mytilineos SA is currently generating about -0.17 per unit of volatility. If you would invest  3,880  in Mytilineos SA on February 23, 2024 and sell it today you would lose (178.00) from holding Mytilineos SA or give up 4.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sato office and  vs.  Mytilineos SA

Sato office

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sato office and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Mytilineos SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mytilineos SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 Sato Office and Mytilineos

The main advantage of trading using opposite Sato Office and Mytilineos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sato Office 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 Sato office and 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .