Correlation Between First Advantage and MYR
Can any of the company-specific risk be diversified away by investing in both First Advantage 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 First Advantage and MYR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Advantage Corp and MYR Group, you can compare the effects of market volatilities on First Advantage 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 First Advantage with a short position of MYR. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and MYR.
Diversification Opportunities for First Advantage and MYR
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and MYR is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR Group and First Advantage 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 First Advantage Corp 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 First Advantage i.e., First Advantage and MYR go up and down completely randomly.
Pair Corralation between First Advantage and MYR
Allowing for the 90-day total investment horizon First Advantage Corp is expected to generate 0.5 times more return on investment than MYR. However, First Advantage Corp is 2.02 times less risky than MYR. It trades about 0.09 of its potential returns per unit of risk. MYR Group is currently generating about 0.02 per unit of risk. If you would invest 1,648 in First Advantage Corp on August 30, 2024 and sell it today you would earn a total of 325.00 from holding First Advantage Corp or generate 19.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Advantage Corp vs. MYR Group
Performance |
| Timeline |
| First Advantage Corp |
| MYR Group |
First Advantage and MYR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and MYR
The main advantage of trading using opposite First Advantage and MYR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage 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.| First Advantage vs. Manhattan Associates | First Advantage vs. Paycom Soft | First Advantage vs. Clearwater Analytics Holdings | First Advantage vs. Procore Technologies |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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