Correlation Between MYR and Concrete Pumping
Can any of the company-specific risk be diversified away by investing in both MYR and Concrete Pumping 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 MYR and Concrete Pumping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYR Group and Concrete Pumping Holdings, you can compare the effects of market volatilities on MYR and Concrete Pumping 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 MYR with a short position of Concrete Pumping. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYR and Concrete Pumping.
Diversification Opportunities for MYR and Concrete Pumping
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MYR and Concrete is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and Concrete Pumping Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concrete Pumping Holdings and MYR 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 MYR Group are associated (or correlated) with Concrete Pumping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concrete Pumping Holdings has no effect on the direction of MYR i.e., MYR and Concrete Pumping go up and down completely randomly.
Pair Corralation between MYR and Concrete Pumping
Given the investment horizon of 90 days MYR is expected to generate 15.37 times less return on investment than Concrete Pumping. But when comparing it to its historical volatility, MYR Group is 9.23 times less risky than Concrete Pumping. It trades about 0.03 of its potential returns per unit of risk. Concrete Pumping Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Concrete Pumping Holdings on August 31, 2024 and sell it today you would lose (3.10) from holding Concrete Pumping Holdings or give up 51.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.29% |
| Values | Daily Returns |
MYR Group vs. Concrete Pumping Holdings
Performance |
| Timeline |
| MYR Group |
| Concrete Pumping Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MYR and Concrete Pumping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYR and Concrete Pumping
The main advantage of trading using opposite MYR and Concrete Pumping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYR position performs unexpectedly, Concrete Pumping 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 Concrete Pumping will offset losses from the drop in Concrete Pumping's long position.The idea behind MYR Group and Concrete Pumping Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Concrete Pumping vs. Diamond Estates Wines | Concrete Pumping vs. CF Industries Holdings | Concrete Pumping vs. Hawkins | Concrete Pumping vs. Hudson Technologies |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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