Correlation Between Mayville Engineering and Worthington Industries
Can any of the company-specific risk be diversified away by investing in both Mayville Engineering and Worthington Industries 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 Mayville Engineering and Worthington Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayville Engineering Co and Worthington Industries, you can compare the effects of market volatilities on Mayville Engineering and Worthington Industries 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 Mayville Engineering with a short position of Worthington Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayville Engineering and Worthington Industries.
Diversification Opportunities for Mayville Engineering and Worthington Industries
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mayville and Worthington is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mayville Engineering Co and Worthington Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Industries and Mayville Engineering 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 Mayville Engineering Co are associated (or correlated) with Worthington Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worthington Industries has no effect on the direction of Mayville Engineering i.e., Mayville Engineering and Worthington Industries go up and down completely randomly.
Pair Corralation between Mayville Engineering and Worthington Industries
Considering the 90-day investment horizon Mayville Engineering is expected to generate 1.36 times less return on investment than Worthington Industries. In addition to that, Mayville Engineering is 1.41 times more volatile than Worthington Industries. It trades about 0.02 of its total potential returns per unit of risk. Worthington Industries is currently generating about 0.03 per unit of volatility. If you would invest 3,288 in Worthington Industries on October 20, 2024 and sell it today you would earn a total of 913.00 from holding Worthington Industries or generate 27.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mayville Engineering Co vs. Worthington Industries
Performance |
| Timeline |
| Mayville Engineering |
| Worthington Industries |
Mayville Engineering and Worthington Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayville Engineering and Worthington Industries
The main advantage of trading using opposite Mayville Engineering and Worthington Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayville Engineering position performs unexpectedly, Worthington Industries 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 Worthington Industries will offset losses from the drop in Worthington Industries' long position.| Mayville Engineering vs. Insteel Industries | Mayville Engineering vs. Gulf Island Fabrication | Mayville Engineering vs. ESAB Corp | Mayville Engineering vs. Northwest Pipe |
| Worthington Industries vs. Allegheny Technologies Incorporated | Worthington Industries vs. ESAB Corp | Worthington Industries vs. Insteel Industries | Worthington Industries vs. Mayville Engineering Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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