Correlation Between MYR and JGC Corp
Can any of the company-specific risk be diversified away by investing in both MYR and JGC Corp 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 JGC Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYR Group and JGC Corp, you can compare the effects of market volatilities on MYR and JGC Corp 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 JGC Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYR and JGC Corp.
Diversification Opportunities for MYR and JGC Corp
Modest diversification
The 3 months correlation between MYR and JGC is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and JGC Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JGC Corp 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 JGC Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JGC Corp has no effect on the direction of MYR i.e., MYR and JGC Corp go up and down completely randomly.
Pair Corralation between MYR and JGC Corp
Given the investment horizon of 90 days MYR Group is expected to under-perform the JGC Corp. In addition to that, MYR is 1.67 times more volatile than JGC Corp. It trades about -0.06 of its total potential returns per unit of risk. JGC Corp is currently generating about 0.18 per unit of volatility. If you would invest 1,535 in JGC Corp on November 7, 2024 and sell it today you would earn a total of 100.00 from holding JGC Corp or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
MYR Group vs. JGC Corp
Performance |
| Timeline |
| MYR Group |
| JGC Corp |
MYR and JGC Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYR and JGC Corp
The main advantage of trading using opposite MYR and JGC Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYR position performs unexpectedly, JGC Corp 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 JGC Corp will offset losses from the drop in JGC Corp's long position.| MYR vs. Comfort Systems USA | MYR vs. Granite Construction Incorporated | MYR vs. Dycom Industries | MYR vs. MasTec Inc |
| JGC Corp vs. Bilfinger SE ADR | JGC Corp vs. ACS Actividades De | JGC Corp vs. Acciona SA | JGC Corp vs. ACS Actividades de |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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