Correlation Between MSA Safety and Bridger Aerospace
Can any of the company-specific risk be diversified away by investing in both MSA Safety and Bridger Aerospace 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 MSA Safety and Bridger Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSA Safety and Bridger Aerospace Group, you can compare the effects of market volatilities on MSA Safety and Bridger Aerospace 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 MSA Safety with a short position of Bridger Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSA Safety and Bridger Aerospace.
Diversification Opportunities for MSA Safety and Bridger Aerospace
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between MSA and Bridger is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding MSA Safety and Bridger Aerospace Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridger Aerospace and MSA Safety 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 MSA Safety are associated (or correlated) with Bridger Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridger Aerospace has no effect on the direction of MSA Safety i.e., MSA Safety and Bridger Aerospace go up and down completely randomly.
Pair Corralation between MSA Safety and Bridger Aerospace
Considering the 90-day investment horizon MSA Safety is expected to generate 106.58 times less return on investment than Bridger Aerospace. But when comparing it to its historical volatility, MSA Safety is 7.64 times less risky than Bridger Aerospace. It trades about 0.02 of its potential returns per unit of risk. Bridger Aerospace Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 202.00 in Bridger Aerospace Group on November 2, 2024 and sell it today you would earn a total of 74.00 from holding Bridger Aerospace Group or generate 36.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSA Safety vs. Bridger Aerospace Group
Performance |
| Timeline |
| MSA Safety |
| Bridger Aerospace |
MSA Safety and Bridger Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSA Safety and Bridger Aerospace
The main advantage of trading using opposite MSA Safety and Bridger Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSA Safety position performs unexpectedly, Bridger Aerospace 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 Bridger Aerospace will offset losses from the drop in Bridger Aerospace's long position.| MSA Safety vs. Allegion PLC | MSA Safety vs. Resideo Technologies | MSA Safety vs. NL Industries | MSA Safety vs. Brady |
| Bridger Aerospace vs. Allegion PLC | Bridger Aerospace vs. MSA Safety | Bridger Aerospace vs. Resideo Technologies | Bridger Aerospace vs. NL Industries |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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