Correlation Between Espey Mfg and Mistras
Can any of the company-specific risk be diversified away by investing in both Espey Mfg 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 Espey Mfg and Mistras into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Espey Mfg Electronics and Mistras Group, you can compare the effects of market volatilities on Espey Mfg 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 Espey Mfg with a short position of Mistras. Check out your portfolio center. Please also check ongoing floating volatility patterns of Espey Mfg and Mistras.
Diversification Opportunities for Espey Mfg and Mistras
Very good diversification
The 3 months correlation between Espey and Mistras is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Espey Mfg Electronics and Mistras Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mistras Group and Espey Mfg 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 Espey Mfg Electronics 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 Espey Mfg i.e., Espey Mfg and Mistras go up and down completely randomly.
Pair Corralation between Espey Mfg and Mistras
Considering the 90-day investment horizon Espey Mfg is expected to generate 1.29 times less return on investment than Mistras. In addition to that, Espey Mfg is 1.03 times more volatile than Mistras Group. It trades about 0.03 of its total potential returns per unit of risk. Mistras Group is currently generating about 0.04 per unit of volatility. If you would invest 826.00 in Mistras Group on November 30, 2024 and sell it today you would earn a total of 144.00 from holding Mistras Group or generate 17.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Espey Mfg Electronics vs. Mistras Group
Performance |
Timeline |
Espey Mfg Electronics |
Mistras Group |
Espey Mfg and Mistras Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Espey Mfg and Mistras
The main advantage of trading using opposite Espey Mfg and Mistras positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Espey Mfg 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.Espey Mfg vs. Chicago Rivet Machine | ||
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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