Correlation Between Equifax and Mistras
Can any of the company-specific risk be diversified away by investing in both Equifax and Mistras 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 Equifax and Mistras into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equifax and Mistras Group, you can compare the effects of market volatilities on Equifax and Mistras 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 Equifax with a short position of Mistras. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equifax and Mistras.
Diversification Opportunities for Equifax and Mistras
Poor diversification
The 3 months correlation between Equifax and Mistras is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Equifax and Mistras Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mistras Group and Equifax 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 Equifax are associated (or correlated) with Mistras. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mistras Group has no effect on the direction of Equifax i.e., Equifax and Mistras go up and down completely randomly.
Pair Corralation between Equifax and Mistras
Considering the 90-day investment horizon Equifax is expected to generate 2.07 times less return on investment than Mistras. But when comparing it to its historical volatility, Equifax is 1.66 times less risky than Mistras. It trades about 0.04 of its potential returns per unit of risk. Mistras Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 513.00 in Mistras Group on September 14, 2024 and sell it today you would earn a total of 404.00 from holding Mistras Group or generate 78.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Equifax vs. Mistras Group
Performance |
| Timeline |
| Equifax |
| Mistras Group |
Equifax and Mistras Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equifax and Mistras
The main advantage of trading using opposite Equifax and Mistras positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equifax position performs unexpectedly, Mistras 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 Mistras will offset losses from the drop in Mistras' long position.| Equifax vs. Verisk Analytics | Equifax vs. Exponent | Equifax vs. FTI Consulting | Equifax vs. Franklin Covey |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |