Correlation Between Loomis AB and MSA Safety
Can any of the company-specific risk be diversified away by investing in both Loomis AB and MSA Safety 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 Loomis AB and MSA Safety into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loomis AB and MSA Safety, you can compare the effects of market volatilities on Loomis AB and MSA Safety 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 Loomis AB with a short position of MSA Safety. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis AB and MSA Safety.
Diversification Opportunities for Loomis AB and MSA Safety
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Loomis and MSA is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Loomis AB and MSA Safety in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSA Safety and Loomis AB 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 Loomis AB are associated (or correlated) with MSA Safety. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSA Safety has no effect on the direction of Loomis AB i.e., Loomis AB and MSA Safety go up and down completely randomly.
Pair Corralation between Loomis AB and MSA Safety
Assuming the 90 days horizon Loomis AB is expected to under-perform the MSA Safety. In addition to that, Loomis AB is 1.87 times more volatile than MSA Safety. It trades about 0.0 of its total potential returns per unit of risk. MSA Safety is currently generating about 0.01 per unit of volatility. If you would invest 16,682 in MSA Safety on October 24, 2024 and sell it today you would lose (56.50) from holding MSA Safety or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.64% |
| Values | Daily Returns |
Loomis AB vs. MSA Safety
Performance |
| Timeline |
| Loomis AB |
| MSA Safety |
Loomis AB and MSA Safety Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loomis AB and MSA Safety
The main advantage of trading using opposite Loomis AB and MSA Safety positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis AB position performs unexpectedly, MSA Safety 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 MSA Safety will offset losses from the drop in MSA Safety's long position.| Loomis AB vs. Allegion PLC | Loomis AB vs. MSA Safety | Loomis AB vs. Resideo Technologies | Loomis AB vs. NL Industries |
| MSA Safety vs. Allegion PLC | MSA Safety vs. Resideo Technologies | MSA Safety vs. NL Industries | MSA Safety vs. Brady |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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