Correlation Between Mistras and Sunrun
Can any of the company-specific risk be diversified away by investing in both Mistras and Sunrun 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 Sunrun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mistras Group and Sunrun Inc, you can compare the effects of market volatilities on Mistras and Sunrun 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 Sunrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and Sunrun.
Diversification Opportunities for Mistras and Sunrun
Poor diversification
The 3 months correlation between Mistras and Sunrun is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and Sunrun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrun Inc 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 Sunrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunrun Inc has no effect on the direction of Mistras i.e., Mistras and Sunrun go up and down completely randomly.
Pair Corralation between Mistras and Sunrun
Allowing for the 90-day total investment horizon Mistras Group is expected to generate 0.73 times more return on investment than Sunrun. However, Mistras Group is 1.38 times less risky than Sunrun. It trades about -0.07 of its potential returns per unit of risk. Sunrun Inc is currently generating about -0.18 per unit of risk. If you would invest 1,115 in Mistras Group on August 26, 2024 and sell it today you would lose (188.00) from holding Mistras Group or give up 16.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mistras Group vs. Sunrun Inc
Performance |
| Timeline |
| Mistras Group |
| Sunrun Inc |
Mistras and Sunrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mistras and Sunrun
The main advantage of trading using opposite Mistras and Sunrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras position performs unexpectedly, Sunrun 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 Sunrun will offset losses from the drop in Sunrun's long position.| Mistras vs. Team Inc | Mistras vs. Thermon Group Holdings | Mistras vs. MRC Global | Mistras vs. Vishay Precision Group |
| Sunrun vs. 1847 Holdings LLC | Sunrun vs. Westport Fuel Systems | Sunrun vs. Falcons Beyond Global, | Sunrun vs. Brookfield Business Partners |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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