Correlation Between Mistras and AAON
Can any of the company-specific risk be diversified away by investing in both Mistras and AAON 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 Mistras and AAON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mistras Group and AAON Inc, you can compare the effects of market volatilities on Mistras and AAON 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 Mistras with a short position of AAON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and AAON.
Diversification Opportunities for Mistras and AAON
Excellent diversification
The 3 months correlation between Mistras and AAON is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and AAON Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAON Inc and Mistras 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 Mistras Group are associated (or correlated) with AAON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAON Inc has no effect on the direction of Mistras i.e., Mistras and AAON go up and down completely randomly.
Pair Corralation between Mistras and AAON
Allowing for the 90-day total investment horizon Mistras Group is expected to under-perform the AAON. In addition to that, Mistras is 1.29 times more volatile than AAON Inc. It trades about -0.13 of its total potential returns per unit of risk. AAON Inc is currently generating about 0.26 per unit of volatility. If you would invest 10,689 in AAON Inc on August 24, 2024 and sell it today you would earn a total of 2,867 from holding AAON Inc or generate 26.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mistras Group vs. AAON Inc
Performance |
| Timeline |
| Mistras Group |
| AAON Inc |
Mistras and AAON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mistras and AAON
The main advantage of trading using opposite Mistras and AAON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras position performs unexpectedly, AAON 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 AAON will offset losses from the drop in AAON's long position.| Mistras vs. Team Inc | Mistras vs. Thermon Group Holdings | Mistras vs. MRC Global | Mistras vs. Vishay Precision Group |
| AAON vs. Quanex Building Products | AAON vs. Gibraltar Industries | AAON vs. Armstrong World Industries | AAON vs. Beacon Roofing Supply |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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