Correlation Between Worthington Industries and Mayville Engineering
Can any of the company-specific risk be diversified away by investing in both Worthington Industries 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 Worthington Industries and Mayville Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worthington Industries and Mayville Engineering Co, you can compare the effects of market volatilities on Worthington Industries 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 Worthington Industries with a short position of Mayville Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worthington Industries and Mayville Engineering.
Diversification Opportunities for Worthington Industries and Mayville Engineering
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Worthington and Mayville is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Worthington Industries and Mayville Engineering Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayville Engineering and Worthington Industries 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 Worthington Industries 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 Worthington Industries i.e., Worthington Industries and Mayville Engineering go up and down completely randomly.
Pair Corralation between Worthington Industries and Mayville Engineering
Considering the 90-day investment horizon Worthington Industries is expected to generate 0.57 times more return on investment than Mayville Engineering. However, Worthington Industries is 1.77 times less risky than Mayville Engineering. It trades about 0.05 of its potential returns per unit of risk. Mayville Engineering Co is currently generating about -0.13 per unit of risk. If you would invest 3,879 in Worthington Industries on August 24, 2024 and sell it today you would earn a total of 78.00 from holding Worthington Industries or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Worthington Industries vs. Mayville Engineering Co
Performance |
| Timeline |
| Worthington Industries |
| Mayville Engineering |
Worthington Industries and Mayville Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worthington Industries and Mayville Engineering
The main advantage of trading using opposite Worthington Industries and Mayville Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worthington Industries 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.| Worthington Industries vs. Allegheny Technologies Incorporated | Worthington Industries vs. Haynes International | Worthington Industries vs. ESAB Corp | Worthington Industries vs. Insteel Industries |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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