Correlation Between Mueller Industries and Tredegar
Can any of the company-specific risk be diversified away by investing in both Mueller Industries and Tredegar 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 Mueller Industries and Tredegar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mueller Industries and Tredegar, you can compare the effects of market volatilities on Mueller Industries and Tredegar 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 Mueller Industries with a short position of Tredegar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mueller Industries and Tredegar.
Diversification Opportunities for Mueller Industries and Tredegar
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mueller and Tredegar is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Mueller Industries and Tredegar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tredegar and Mueller Industries 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 Mueller Industries are associated (or correlated) with Tredegar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tredegar has no effect on the direction of Mueller Industries i.e., Mueller Industries and Tredegar go up and down completely randomly.
Pair Corralation between Mueller Industries and Tredegar
Considering the 90-day investment horizon Mueller Industries is expected to generate 0.62 times more return on investment than Tredegar. However, Mueller Industries is 1.61 times less risky than Tredegar. It trades about 0.11 of its potential returns per unit of risk. Tredegar is currently generating about 0.07 per unit of risk. If you would invest 4,469 in Mueller Industries on November 9, 2024 and sell it today you would earn a total of 3,668 from holding Mueller Industries or generate 82.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mueller Industries vs. Tredegar
Performance |
| Timeline |
| Mueller Industries |
| Tredegar |
Mueller Industries and Tredegar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mueller Industries and Tredegar
The main advantage of trading using opposite Mueller Industries and Tredegar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mueller Industries position performs unexpectedly, Tredegar 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 Tredegar will offset losses from the drop in Tredegar's long position.| Mueller Industries vs. Insteel Industries | Mueller Industries vs. Carpenter Technology | Mueller Industries vs. Northwest Pipe | Mueller Industries vs. Ryerson Holding Corp |
| Tredegar vs. Northwest Pipe | Tredegar vs. Insteel Industries | Tredegar vs. Ryerson Holding Corp | Tredegar vs. ESAB Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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