Correlation Between MSA Safety and HG Holdings
Can any of the company-specific risk be diversified away by investing in both MSA Safety and HG Holdings 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 HG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSA Safety and HG Holdings, you can compare the effects of market volatilities on MSA Safety and HG Holdings 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 HG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSA Safety and HG Holdings.
Diversification Opportunities for MSA Safety and HG Holdings
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MSA and STLY is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding MSA Safety and HG Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HG Holdings 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 HG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HG Holdings has no effect on the direction of MSA Safety i.e., MSA Safety and HG Holdings go up and down completely randomly.
Pair Corralation between MSA Safety and HG Holdings
If you would invest 16,546 in MSA Safety on September 1, 2024 and sell it today you would earn a total of 835.00 from holding MSA Safety or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
MSA Safety vs. HG Holdings
Performance |
| Timeline |
| MSA Safety |
| HG Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MSA Safety and HG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSA Safety and HG Holdings
The main advantage of trading using opposite MSA Safety and HG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSA Safety position performs unexpectedly, HG Holdings 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 HG Holdings will offset losses from the drop in HG Holdings' long position.| MSA Safety vs. Allegion PLC | MSA Safety vs. Resideo Technologies | MSA Safety vs. NL Industries | MSA Safety vs. Brady |
| HG Holdings vs. Hooker Furniture | HG Holdings vs. Marine Products | HG Holdings vs. United Fire Group | HG Holdings vs. Bassett Furniture 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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