Correlation Between Mistras and Espey Mfg
Can any of the company-specific risk be diversified away by investing in both Mistras and Espey Mfg 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 Espey Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mistras Group and Espey Mfg Electronics, you can compare the effects of market volatilities on Mistras and Espey Mfg 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 Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and Espey Mfg.
Diversification Opportunities for Mistras and Espey Mfg
Very good diversification
The 3 months correlation between Mistras and Espey is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and Espey Mfg Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Espey Mfg Electronics 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 Espey Mfg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Espey Mfg Electronics has no effect on the direction of Mistras i.e., Mistras and Espey Mfg go up and down completely randomly.
Pair Corralation between Mistras and Espey Mfg
Allowing for the 90-day total investment horizon Mistras Group is expected to generate 0.82 times more return on investment than Espey Mfg. However, Mistras Group is 1.21 times less risky than Espey Mfg. It trades about 0.4 of its potential returns per unit of risk. Espey Mfg Electronics is currently generating about 0.11 per unit of risk. If you would invest 897.00 in Mistras Group on November 9, 2024 and sell it today you would earn a total of 107.00 from holding Mistras Group or generate 11.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mistras Group vs. Espey Mfg Electronics
Performance |
| Timeline |
| Mistras Group |
| Espey Mfg Electronics |
Mistras and Espey Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mistras and Espey Mfg
The main advantage of trading using opposite Mistras and Espey Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras position performs unexpectedly, Espey Mfg 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 Espey Mfg will offset losses from the drop in Espey Mfg's long position.| Mistras vs. Team Inc | Mistras vs. Thermon Group Holdings | Mistras vs. MRC Global | Mistras vs. Vishay Precision Group |
| Espey Mfg vs. Chicago Rivet Machine | Espey Mfg vs. Eastern Co | Espey Mfg vs. Servotronics | Espey Mfg vs. Evans Bancorp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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