Correlation Between MYR and Southland Holdings
Can any of the company-specific risk be diversified away by investing in both MYR and Southland Holdings 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 Southland Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYR Group and Southland Holdings, you can compare the effects of market volatilities on MYR and Southland Holdings 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 Southland Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYR and Southland Holdings.
Diversification Opportunities for MYR and Southland Holdings
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MYR and Southland is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and Southland Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southland 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 Southland Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southland Holdings has no effect on the direction of MYR i.e., MYR and Southland Holdings go up and down completely randomly.
Pair Corralation between MYR and Southland Holdings
Given the investment horizon of 90 days MYR Group is expected to generate 0.42 times more return on investment than Southland Holdings. However, MYR Group is 2.4 times less risky than Southland Holdings. It trades about 0.34 of its potential returns per unit of risk. Southland Holdings is currently generating about 0.01 per unit of risk. If you would invest 11,676 in MYR Group on August 27, 2024 and sell it today you would earn a total of 3,429 from holding MYR Group or generate 29.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MYR Group vs. Southland Holdings
Performance |
| Timeline |
| MYR Group |
| Southland Holdings |
MYR and Southland Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYR and Southland Holdings
The main advantage of trading using opposite MYR and Southland Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYR position performs unexpectedly, Southland Holdings 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 Southland Holdings will offset losses from the drop in Southland Holdings' long position.The idea behind MYR Group and Southland 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.| Southland Holdings vs. Cedar Realty Trust | Southland Holdings vs. CECO Environmental Corp | Southland Holdings vs. National Vision Holdings | Southland Holdings vs. Simon Property 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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