Correlation Between Matrix Service and China State
Can any of the company-specific risk be diversified away by investing in both Matrix Service and China State 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 Matrix Service and China State into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matrix Service Co and China State Construction, you can compare the effects of market volatilities on Matrix Service and China State 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 Matrix Service with a short position of China State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matrix Service and China State.
Diversification Opportunities for Matrix Service and China State
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Matrix and China is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Matrix Service Co and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State Construction and Matrix Service 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 Matrix Service Co are associated (or correlated) with China State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of Matrix Service i.e., Matrix Service and China State go up and down completely randomly.
Pair Corralation between Matrix Service and China State
Given the investment horizon of 90 days Matrix Service Co is expected to generate 0.58 times more return on investment than China State. However, Matrix Service Co is 1.72 times less risky than China State. It trades about 0.24 of its potential returns per unit of risk. China State Construction is currently generating about -0.22 per unit of risk. If you would invest 1,139 in Matrix Service Co on August 28, 2024 and sell it today you would earn a total of 206.00 from holding Matrix Service Co or generate 18.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matrix Service Co vs. China State Construction
Performance |
| Timeline |
| Matrix Service |
| China State Construction |
Matrix Service and China State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matrix Service and China State
The main advantage of trading using opposite Matrix Service and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matrix Service position performs unexpectedly, China State 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 China State will offset losses from the drop in China State's long position.| Matrix Service vs. EMCOR Group | Matrix Service vs. Comfort Systems USA | Matrix Service vs. Primoris Services | Matrix Service vs. Granite Construction Incorporated |
| China State vs. Aecom Technology | China State vs. Matrix Service Co | China State vs. MYR Group | China State vs. Fluor |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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