Correlation Between Mytilineos and Prodea Real

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

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

Diversification Opportunities for Mytilineos and Prodea Real

0.63

Correlation Coefficient

Mytilineos  Prodea Real

Poor diversification

The 3 months correlation between Mytilineos and Prodea is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mytilineos SA and Prodea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodea Real Estate 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 Prodea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodea Real Estate has no effect on the direction of Mytilineos i.e., Mytilineos and Prodea Real go up and down completely randomly.

Pair Corralation between Mytilineos and Prodea Real

Assuming the 90 days trading horizon Mytilineos is expected to generate 10.73 times less return on investment than Prodea Real. But when comparing it to its historical volatility, Mytilineos SA is 2.78 times less risky than Prodea Real. It trades about 0.01 of its potential returns per unit of risk. Prodea Real Estate is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  666.00  in Prodea Real Estate on September 13, 2024 and sell it today you would earn a total of  24.00  from holding Prodea Real Estate or generate 3.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Mytilineos SA  vs.  Prodea Real Estate

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

Prodea Real Estate

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Prodea Real Estate are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Prodea Real may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mytilineos and Prodea Real

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

The idea behind Mytilineos SA and Prodea Real Estate 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..