Correlation Between Mistras and Geo
Can any of the company-specific risk be diversified away by investing in both Mistras and Geo 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 Geo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mistras Group and Geo Group, you can compare the effects of market volatilities on Mistras and Geo 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 Geo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and Geo.
Diversification Opportunities for Mistras and Geo
Good diversification
The 3 months correlation between Mistras and Geo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and Geo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geo Group 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 Geo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geo Group has no effect on the direction of Mistras i.e., Mistras and Geo go up and down completely randomly.
Pair Corralation between Mistras and Geo
Allowing for the 90-day total investment horizon Mistras is expected to generate 1.04 times less return on investment than Geo. But when comparing it to its historical volatility, Mistras Group is 2.46 times less risky than Geo. It trades about 0.39 of its potential returns per unit of risk. Geo Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,829 in Geo Group on November 3, 2024 and sell it today you would earn a total of 317.00 from holding Geo Group or generate 11.21% 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. Geo Group
Performance |
| Timeline |
| Mistras Group |
| Geo Group |
Mistras and Geo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mistras and Geo
The main advantage of trading using opposite Mistras and Geo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras position performs unexpectedly, Geo 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 Geo will offset losses from the drop in Geo's long position.| Mistras vs. Team Inc | Mistras vs. Thermon Group Holdings | Mistras vs. MRC Global | Mistras vs. Vishay Precision Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |