Correlation Between MYR and Neogen
Can any of the company-specific risk be diversified away by investing in both MYR and Neogen 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 Neogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYR Group and Neogen, you can compare the effects of market volatilities on MYR and Neogen 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 Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYR and Neogen.
Diversification Opportunities for MYR and Neogen
Very good diversification
The 3 months correlation between MYR and Neogen is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of MYR i.e., MYR and Neogen go up and down completely randomly.
Pair Corralation between MYR and Neogen
Given the investment horizon of 90 days MYR Group is expected to generate 1.26 times more return on investment than Neogen. However, MYR is 1.26 times more volatile than Neogen. It trades about 0.38 of its potential returns per unit of risk. Neogen is currently generating about 0.03 per unit of risk. If you would invest 11,676 in MYR Group on August 29, 2024 and sell it today you would earn a total of 4,201 from holding MYR Group or generate 35.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MYR Group vs. Neogen
Performance |
| Timeline |
| MYR Group |
| Neogen |
MYR and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYR and Neogen
The main advantage of trading using opposite MYR and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYR position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen's long position.| MYR vs. Comfort Systems USA | MYR vs. Granite Construction Incorporated | MYR vs. Dycom Industries | MYR vs. MasTec Inc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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