Correlation Between Mistras and CSX
Can any of the company-specific risk be diversified away by investing in both Mistras and CSX 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 CSX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mistras Group and CSX Corporation, you can compare the effects of market volatilities on Mistras and CSX 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 CSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and CSX.
Diversification Opportunities for Mistras and CSX
Very good diversification
The 3 months correlation between Mistras and CSX is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and CSX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX Corporation 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 CSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX Corporation has no effect on the direction of Mistras i.e., Mistras and CSX go up and down completely randomly.
Pair Corralation between Mistras and CSX
Allowing for the 90-day total investment horizon Mistras Group is expected to generate 2.33 times more return on investment than CSX. However, Mistras is 2.33 times more volatile than CSX Corporation. It trades about 0.07 of its potential returns per unit of risk. CSX Corporation is currently generating about 0.03 per unit of risk. If you would invest 388.00 in Mistras Group on August 27, 2024 and sell it today you would earn a total of 539.00 from holding Mistras Group or generate 138.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mistras Group vs. CSX Corp.
Performance |
| Timeline |
| Mistras Group |
| CSX Corporation |
Mistras and CSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mistras and CSX
The main advantage of trading using opposite Mistras and CSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras position performs unexpectedly, CSX 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 CSX will offset losses from the drop in CSX's long position.| Mistras vs. Franklin Covey | Mistras vs. TransUnion | Mistras vs. ICF International | Mistras vs. Huron Consulting Group |
| CSX vs. Union Pacific | CSX vs. Norfolk Southern | CSX vs. Westinghouse Air Brake | CSX vs. Trinity Industries |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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