Correlation Between Mistras and Wex
Can any of the company-specific risk be diversified away by investing in both Mistras and Wex 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 Wex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mistras Group and Wex Inc, you can compare the effects of market volatilities on Mistras and Wex 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 Wex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and Wex.
Diversification Opportunities for Mistras and Wex
Poor diversification
The 3 months correlation between Mistras and Wex is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and Wex Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wex 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 Wex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wex Inc has no effect on the direction of Mistras i.e., Mistras and Wex go up and down completely randomly.
Pair Corralation between Mistras and Wex
Allowing for the 90-day total investment horizon Mistras Group is expected to under-perform the Wex. In addition to that, Mistras is 2.71 times more volatile than Wex Inc. It trades about -0.11 of its total potential returns per unit of risk. Wex Inc is currently generating about 0.12 per unit of volatility. If you would invest 17,876 in Wex Inc on August 28, 2024 and sell it today you would earn a total of 943.00 from holding Wex Inc or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mistras Group vs. Wex Inc
Performance |
| Timeline |
| Mistras Group |
| Wex Inc |
Mistras and Wex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mistras and Wex
The main advantage of trading using opposite Mistras and Wex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras position performs unexpectedly, Wex 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 Wex will offset losses from the drop in Wex's long position.| Mistras vs. Franklin Covey | Mistras vs. TransUnion | Mistras vs. ICF International | Mistras vs. Huron Consulting Group |
| Wex vs. Oneconnect Financial Technology | Wex vs. Global Business Travel | Wex vs. Alight Inc | Wex vs. CS Disco LLC |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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