Correlation Between Big Tree and MYR
Can any of the company-specific risk be diversified away by investing in both Big Tree and MYR 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 Big Tree and MYR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Tree Cloud and MYR Group, you can compare the effects of market volatilities on Big Tree and MYR 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 Big Tree with a short position of MYR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Tree and MYR.
Diversification Opportunities for Big Tree and MYR
Very good diversification
The 3 months correlation between Big and MYR is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Big Tree Cloud and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR Group and Big Tree 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 Big Tree Cloud are associated (or correlated) with MYR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYR Group has no effect on the direction of Big Tree i.e., Big Tree and MYR go up and down completely randomly.
Pair Corralation between Big Tree and MYR
Assuming the 90 days horizon Big Tree Cloud is expected to under-perform the MYR. In addition to that, Big Tree is 4.5 times more volatile than MYR Group. It trades about -0.08 of its total potential returns per unit of risk. MYR Group is currently generating about 0.3 per unit of volatility. If you would invest 13,324 in MYR Group on September 4, 2024 and sell it today you would earn a total of 2,483 from holding MYR Group or generate 18.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Tree Cloud vs. MYR Group
Performance |
| Timeline |
| Big Tree Cloud |
| MYR Group |
Big Tree and MYR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Tree and MYR
The main advantage of trading using opposite Big Tree and MYR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Tree position performs unexpectedly, MYR 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 MYR will offset losses from the drop in MYR's long position.| Big Tree vs. MYR Group | Big Tree vs. Ryanair Holdings PLC | Big Tree vs. EvoAir Holdings | Big Tree vs. Emerson Electric |
| MYR vs. Comfort Systems USA | MYR vs. Granite Construction Incorporated | MYR vs. Dycom Industries | MYR vs. MasTec Inc |
Check out your portfolio center.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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