Correlation Between Great Lakes and MYR
Can any of the company-specific risk be diversified away by investing in both Great Lakes 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 Great Lakes and MYR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Lakes Dredge and MYR Group, you can compare the effects of market volatilities on Great Lakes 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 Great Lakes with a short position of MYR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Lakes and MYR.
Diversification Opportunities for Great Lakes and MYR
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Great and MYR is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Great Lakes Dredge and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR Group and Great Lakes 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 Great Lakes Dredge 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 Great Lakes i.e., Great Lakes and MYR go up and down completely randomly.
Pair Corralation between Great Lakes and MYR
Given the investment horizon of 90 days Great Lakes Dredge is expected to generate 1.11 times more return on investment than MYR. However, Great Lakes is 1.11 times more volatile than MYR Group. It trades about 0.05 of its potential returns per unit of risk. MYR Group is currently generating about 0.04 per unit of risk. If you would invest 651.00 in Great Lakes Dredge on November 2, 2024 and sell it today you would earn a total of 464.00 from holding Great Lakes Dredge or generate 71.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Lakes Dredge vs. MYR Group
Performance |
| Timeline |
| Great Lakes Dredge |
| MYR Group |
Great Lakes and MYR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Lakes and MYR
The main advantage of trading using opposite Great Lakes and MYR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Lakes 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.| Great Lakes vs. Primoris Services | Great Lakes vs. Granite Construction Incorporated | Great Lakes vs. MYR Group | Great Lakes vs. Southland Holdings |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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