Correlation Between Mistras and Driven Brands
Can any of the company-specific risk be diversified away by investing in both Mistras and Driven Brands 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 Driven Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mistras Group and Driven Brands Holdings, you can compare the effects of market volatilities on Mistras and Driven Brands 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 Driven Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and Driven Brands.
Diversification Opportunities for Mistras and Driven Brands
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mistras and Driven is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and Driven Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Driven Brands Holdings 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 Driven Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Driven Brands Holdings has no effect on the direction of Mistras i.e., Mistras and Driven Brands go up and down completely randomly.
Pair Corralation between Mistras and Driven Brands
Allowing for the 90-day total investment horizon Mistras Group is expected to generate 1.17 times more return on investment than Driven Brands. However, Mistras is 1.17 times more volatile than Driven Brands Holdings. It trades about 0.34 of its potential returns per unit of risk. Driven Brands Holdings is currently generating about 0.09 per unit of risk. If you would invest 906.00 in Mistras Group on November 1, 2024 and sell it today you would earn a total of 90.00 from holding Mistras Group or generate 9.93% 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. Driven Brands Holdings
Performance |
| Timeline |
| Mistras Group |
| Driven Brands Holdings |
Mistras and Driven Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mistras and Driven Brands
The main advantage of trading using opposite Mistras and Driven Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras position performs unexpectedly, Driven Brands 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 Driven Brands will offset losses from the drop in Driven Brands' long position.| Mistras vs. Team Inc | Mistras vs. Thermon Group Holdings | Mistras vs. MRC Global | Mistras vs. Vishay Precision Group |
| Driven Brands vs. CarGurus | Driven Brands vs. KAR Auction Services | Driven Brands vs. Kingsway Financial Services | Driven Brands vs. Group 1 Automotive |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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