Correlation Between Matrix Service and ENGlobal
Can any of the company-specific risk be diversified away by investing in both Matrix Service and ENGlobal 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 ENGlobal 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 ENGlobal, you can compare the effects of market volatilities on Matrix Service and ENGlobal 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 ENGlobal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matrix Service and ENGlobal.
Diversification Opportunities for Matrix Service and ENGlobal
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Matrix and ENGlobal is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Matrix Service Co and ENGlobal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENGlobal 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 ENGlobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENGlobal has no effect on the direction of Matrix Service i.e., Matrix Service and ENGlobal go up and down completely randomly.
Pair Corralation between Matrix Service and ENGlobal
Given the investment horizon of 90 days Matrix Service is expected to generate 5.92 times less return on investment than ENGlobal. But when comparing it to its historical volatility, Matrix Service Co is 10.55 times less risky than ENGlobal. It trades about 0.06 of its potential returns per unit of risk. ENGlobal is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 655.00 in ENGlobal on November 2, 2024 and sell it today you would lose (547.00) from holding ENGlobal or give up 83.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 92.71% |
| Values | Daily Returns |
Matrix Service Co vs. ENGlobal
Performance |
| Timeline |
| Matrix Service |
| ENGlobal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Matrix Service and ENGlobal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matrix Service and ENGlobal
The main advantage of trading using opposite Matrix Service and ENGlobal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matrix Service position performs unexpectedly, ENGlobal 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 ENGlobal will offset losses from the drop in ENGlobal'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 |
| ENGlobal vs. Fuel Tech | ENGlobal vs. Polar Power | ENGlobal vs. Ocean Power Technologies | ENGlobal vs. Pioneer Power Solutions |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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