Correlation Between MYR and Energy Services
Can any of the company-specific risk be diversified away by investing in both MYR and Energy Services 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 Energy Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYR Group and Energy Services, you can compare the effects of market volatilities on MYR and Energy Services 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 Energy Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYR and Energy Services.
Diversification Opportunities for MYR and Energy Services
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MYR and Energy is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Services 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 Energy Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Services has no effect on the direction of MYR i.e., MYR and Energy Services go up and down completely randomly.
Pair Corralation between MYR and Energy Services
Given the investment horizon of 90 days MYR is expected to generate 1.57 times less return on investment than Energy Services. In addition to that, MYR is 1.26 times more volatile than Energy Services. It trades about 0.29 of its total potential returns per unit of risk. Energy Services is currently generating about 0.58 per unit of volatility. If you would invest 1,024 in Energy Services on August 24, 2024 and sell it today you would earn a total of 482.00 from holding Energy Services or generate 47.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MYR Group vs. Energy Services
Performance |
| Timeline |
| MYR Group |
| Energy Services |
MYR and Energy Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYR and Energy Services
The main advantage of trading using opposite MYR and Energy Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYR position performs unexpectedly, Energy Services 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 Energy Services will offset losses from the drop in Energy Services' long position.| MYR vs. Comfort Systems USA | MYR vs. Granite Construction Incorporated | MYR vs. Dycom Industries | MYR vs. MasTec Inc |
| Energy Services vs. NV5 Global | Energy Services vs. Matrix Service Co | Energy Services vs. MYR Group | Energy Services vs. Comfort Systems USA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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