Correlation Between Mistras and CRA International

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Can any of the company-specific risk be diversified away by investing in both Mistras and CRA International 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 CRA International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mistras Group and CRA International, you can compare the effects of market volatilities on Mistras and CRA International 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 CRA International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and CRA International.

Diversification Opportunities for Mistras and CRA International

-0.41
  Correlation Coefficient

Very good diversification

The 3 months correlation between Mistras and CRA is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and CRA International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRA International 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 CRA International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRA International has no effect on the direction of Mistras i.e., Mistras and CRA International go up and down completely randomly.

Pair Corralation between Mistras and CRA International

Allowing for the 90-day total investment horizon Mistras Group is expected to under-perform the CRA International. In addition to that, Mistras is 2.07 times more volatile than CRA International. It trades about -0.12 of its total potential returns per unit of risk. CRA International is currently generating about 0.03 per unit of volatility. If you would invest  19,231  in CRA International on August 27, 2024 and sell it today you would earn a total of  153.00  from holding CRA International or generate 0.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Mistras Group  vs.  CRA International

 Performance 
       Timeline  
Mistras Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mistras Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
CRA International 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in CRA International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, CRA International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Mistras and CRA International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mistras and CRA International

The main advantage of trading using opposite Mistras and CRA International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras position performs unexpectedly, CRA International 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 CRA International will offset losses from the drop in CRA International's long position.
The idea behind Mistras Group and CRA International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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