Correlation Between SG Blocks and Mayville Engineering
Can any of the company-specific risk be diversified away by investing in both SG Blocks and Mayville Engineering 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 SG Blocks and Mayville Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SG Blocks and Mayville Engineering Co, you can compare the effects of market volatilities on SG Blocks and Mayville Engineering 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 SG Blocks with a short position of Mayville Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of SG Blocks and Mayville Engineering.
Diversification Opportunities for SG Blocks and Mayville Engineering
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SGBX and Mayville is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SG Blocks and Mayville Engineering Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayville Engineering and SG Blocks 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 SG Blocks are associated (or correlated) with Mayville Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayville Engineering has no effect on the direction of SG Blocks i.e., SG Blocks and Mayville Engineering go up and down completely randomly.
Pair Corralation between SG Blocks and Mayville Engineering
Given the investment horizon of 90 days SG Blocks is expected to under-perform the Mayville Engineering. In addition to that, SG Blocks is 3.6 times more volatile than Mayville Engineering Co. It trades about -0.08 of its total potential returns per unit of risk. Mayville Engineering Co is currently generating about 0.05 per unit of volatility. If you would invest 1,283 in Mayville Engineering Co on August 27, 2024 and sell it today you would earn a total of 416.00 from holding Mayville Engineering Co or generate 32.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SG Blocks vs. Mayville Engineering Co
Performance |
| Timeline |
| SG Blocks |
| Mayville Engineering |
SG Blocks and Mayville Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SG Blocks and Mayville Engineering
The main advantage of trading using opposite SG Blocks and Mayville Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SG Blocks position performs unexpectedly, Mayville Engineering 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 Mayville Engineering will offset losses from the drop in Mayville Engineering's long position.| SG Blocks vs. Dave Warrants | SG Blocks vs. Evolv Technologies Holdings | SG Blocks vs. Aquagold International | SG Blocks vs. Morningstar Unconstrained Allocation |
| Mayville Engineering vs. Haynes International | Mayville Engineering vs. Insteel Industries | Mayville Engineering vs. Gulf Island Fabrication | Mayville Engineering vs. ESAB Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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