Correlation Between Lindsay and MYR
Can any of the company-specific risk be diversified away by investing in both Lindsay 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 Lindsay and MYR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindsay and MYR Group, you can compare the effects of market volatilities on Lindsay 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 Lindsay with a short position of MYR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsay and MYR.
Diversification Opportunities for Lindsay and MYR
Very weak diversification
The 3 months correlation between Lindsay and MYR is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lindsay and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR Group and Lindsay 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 Lindsay 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 Lindsay i.e., Lindsay and MYR go up and down completely randomly.
Pair Corralation between Lindsay and MYR
Considering the 90-day investment horizon Lindsay is expected to generate 5.29 times less return on investment than MYR. But when comparing it to its historical volatility, Lindsay is 1.37 times less risky than MYR. It trades about 0.05 of its potential returns per unit of risk. MYR Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 10,352 in MYR Group on August 25, 2024 and sell it today you would earn a total of 4,753 from holding MYR Group or generate 45.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindsay vs. MYR Group
Performance |
| Timeline |
| Lindsay |
| MYR Group |
Lindsay and MYR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsay and MYR
The main advantage of trading using opposite Lindsay and MYR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsay 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.| Lindsay vs. MYR Group | Lindsay vs. Granite Construction Incorporated | Lindsay vs. Construction Partners | Lindsay vs. Great Lakes Dredge |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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