Correlation Between Gulf Island and Mayville Engineering
Can any of the company-specific risk be diversified away by investing in both Gulf Island and Mayville Engineering 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 Gulf Island and Mayville Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gulf Island Fabrication and Mayville Engineering Co, you can compare the effects of market volatilities on Gulf Island and Mayville Engineering 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 Gulf Island with a short position of Mayville Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Island and Mayville Engineering.
Diversification Opportunities for Gulf Island and Mayville Engineering
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gulf and Mayville is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Island Fabrication and Mayville Engineering Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayville Engineering and Gulf Island 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 Gulf Island Fabrication are associated (or correlated) with Mayville Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayville Engineering has no effect on the direction of Gulf Island i.e., Gulf Island and Mayville Engineering go up and down completely randomly.
Pair Corralation between Gulf Island and Mayville Engineering
Given the investment horizon of 90 days Gulf Island is expected to generate 1.18 times less return on investment than Mayville Engineering. But when comparing it to its historical volatility, Gulf Island Fabrication is 1.13 times less risky than Mayville Engineering. It trades about 0.03 of its potential returns per unit of risk. Mayville Engineering Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,271 in Mayville Engineering Co on August 23, 2024 and sell it today you would earn a total of 385.00 from holding Mayville Engineering Co or generate 30.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gulf Island Fabrication vs. Mayville Engineering Co
Performance |
| Timeline |
| Gulf Island Fabrication |
| Mayville Engineering |
Gulf Island and Mayville Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Island and Mayville Engineering
The main advantage of trading using opposite Gulf Island and Mayville Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Island position performs unexpectedly, Mayville Engineering 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 Mayville Engineering will offset losses from the drop in Mayville Engineering's long position.| Gulf Island vs. Haynes International | Gulf Island vs. Insteel Industries | Gulf Island vs. Mayville Engineering Co | Gulf Island vs. ESAB Corp |
| Mayville Engineering vs. Haynes International | Mayville Engineering vs. Insteel Industries | Mayville Engineering vs. Gulf Island Fabrication | Mayville Engineering vs. ESAB Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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