Correlation Between Mistras and Zurn Elkay
Can any of the company-specific risk be diversified away by investing in both Mistras and Zurn Elkay 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 Zurn Elkay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mistras Group and Zurn Elkay Water, you can compare the effects of market volatilities on Mistras and Zurn Elkay 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 Zurn Elkay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and Zurn Elkay.
Diversification Opportunities for Mistras and Zurn Elkay
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mistras and Zurn is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and Zurn Elkay Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurn Elkay Water 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 Zurn Elkay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurn Elkay Water has no effect on the direction of Mistras i.e., Mistras and Zurn Elkay go up and down completely randomly.
Pair Corralation between Mistras and Zurn Elkay
Allowing for the 90-day total investment horizon Mistras Group is expected to generate 1.75 times more return on investment than Zurn Elkay. However, Mistras is 1.75 times more volatile than Zurn Elkay Water. It trades about 0.06 of its potential returns per unit of risk. Zurn Elkay Water is currently generating about 0.08 per unit of risk. If you would invest 511.00 in Mistras Group on October 20, 2024 and sell it today you would earn a total of 450.00 from holding Mistras Group or generate 88.06% 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. Zurn Elkay Water
Performance |
| Timeline |
| Mistras Group |
| Zurn Elkay Water |
Mistras and Zurn Elkay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mistras and Zurn Elkay
The main advantage of trading using opposite Mistras and Zurn Elkay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras position performs unexpectedly, Zurn Elkay 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 Zurn Elkay will offset losses from the drop in Zurn Elkay's long position.| Mistras vs. Team Inc | Mistras vs. Thermon Group Holdings | Mistras vs. MRC Global | Mistras vs. Vishay Precision Group |
| Zurn Elkay vs. Energy Recovery | Zurn Elkay vs. CECO Environmental Corp | Zurn Elkay vs. 374Water Common Stock | Zurn Elkay vs. Federal Signal |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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