Correlation Between MSA Safety and Via Renewables
Can any of the company-specific risk be diversified away by investing in both MSA Safety and Via Renewables 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 Via Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSA Safety and Via Renewables, you can compare the effects of market volatilities on MSA Safety and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSA Safety and Via Renewables.
Diversification Opportunities for MSA Safety and Via Renewables
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MSA and Via is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding MSA Safety and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of MSA Safety i.e., MSA Safety and Via Renewables go up and down completely randomly.
Pair Corralation between MSA Safety and Via Renewables
Considering the 90-day investment horizon MSA Safety is expected to generate 1.48 times more return on investment than Via Renewables. However, MSA Safety is 1.48 times more volatile than Via Renewables. It trades about 0.23 of its potential returns per unit of risk. Via Renewables is currently generating about 0.16 per unit of risk. If you would invest 16,315 in MSA Safety on September 2, 2024 and sell it today you would earn a total of 1,066 from holding MSA Safety or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSA Safety vs. Via Renewables
Performance |
| Timeline |
| MSA Safety |
| Via Renewables |
MSA Safety and Via Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSA Safety and Via Renewables
The main advantage of trading using opposite MSA Safety and Via Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSA Safety position performs unexpectedly, Via Renewables 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 Via Renewables will offset losses from the drop in Via Renewables' long position.| MSA Safety vs. Allegion PLC | MSA Safety vs. Resideo Technologies | MSA Safety vs. NL Industries | MSA Safety vs. Brady |
| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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