Correlation Between Matrix Service and Great Lakes
Can any of the company-specific risk be diversified away by investing in both Matrix Service and Great Lakes 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 Great Lakes 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 Great Lakes Dredge, you can compare the effects of market volatilities on Matrix Service and Great Lakes 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 Great Lakes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matrix Service and Great Lakes.
Diversification Opportunities for Matrix Service and Great Lakes
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Matrix and Great is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Matrix Service Co and Great Lakes Dredge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Lakes Dredge 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 Great Lakes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Lakes Dredge has no effect on the direction of Matrix Service i.e., Matrix Service and Great Lakes go up and down completely randomly.
Pair Corralation between Matrix Service and Great Lakes
Given the investment horizon of 90 days Matrix Service is expected to generate 1.32 times less return on investment than Great Lakes. In addition to that, Matrix Service is 1.26 times more volatile than Great Lakes Dredge. It trades about 0.06 of its total potential returns per unit of risk. Great Lakes Dredge is currently generating about 0.11 per unit of volatility. If you would invest 923.00 in Great Lakes Dredge on August 24, 2024 and sell it today you would earn a total of 309.00 from holding Great Lakes Dredge or generate 33.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matrix Service Co vs. Great Lakes Dredge
Performance |
| Timeline |
| Matrix Service |
| Great Lakes Dredge |
Matrix Service and Great Lakes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matrix Service and Great Lakes
The main advantage of trading using opposite Matrix Service and Great Lakes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matrix Service position performs unexpectedly, Great Lakes 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 Great Lakes will offset losses from the drop in Great Lakes' long position.| Matrix Service vs. EMCOR Group | Matrix Service vs. Comfort Systems USA | Matrix Service vs. Primoris Services | Matrix Service vs. Granite Construction Incorporated |
| Great Lakes vs. Primoris Services | Great Lakes vs. Granite Construction Incorporated | Great Lakes vs. MYR Group | Great Lakes vs. Southland Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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