Correlation Between MYR and Babcock International
Can any of the company-specific risk be diversified away by investing in both MYR and Babcock International 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 Babcock International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYR Group and Babcock International Group, you can compare the effects of market volatilities on MYR and Babcock International 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 Babcock International. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYR and Babcock International.
Diversification Opportunities for MYR and Babcock International
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MYR and Babcock is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and Babcock International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Babcock International 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 Babcock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Babcock International has no effect on the direction of MYR i.e., MYR and Babcock International go up and down completely randomly.
Pair Corralation between MYR and Babcock International
Given the investment horizon of 90 days MYR Group is expected to generate 1.13 times more return on investment than Babcock International. However, MYR is 1.13 times more volatile than Babcock International Group. It trades about 0.03 of its potential returns per unit of risk. Babcock International Group is currently generating about 0.0 per unit of risk. If you would invest 14,926 in MYR Group on September 2, 2024 and sell it today you would earn a total of 864.00 from holding MYR Group or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MYR Group vs. Babcock International Group
Performance |
| Timeline |
| MYR Group |
| Babcock International |
MYR and Babcock International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYR and Babcock International
The main advantage of trading using opposite MYR and Babcock International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYR position performs unexpectedly, Babcock International 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 Babcock International will offset losses from the drop in Babcock International's long position.| MYR vs. Comfort Systems USA | MYR vs. Granite Construction Incorporated | MYR vs. Dycom Industries | MYR vs. MasTec Inc |
| Babcock International vs. Orion Group Holdings | Babcock International vs. Agrify Corp | Babcock International vs. Matrix Service Co | Babcock International vs. MYR Group |
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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