Correlation Between Bridger Aerospace and Mistras

Can any of the company-specific risk be diversified away by investing in both Bridger Aerospace and Mistras 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 Bridger Aerospace and Mistras into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bridger Aerospace Group and Mistras Group, you can compare the effects of market volatilities on Bridger Aerospace and Mistras 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 Bridger Aerospace with a short position of Mistras. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridger Aerospace and Mistras.

Diversification Opportunities for Bridger Aerospace and Mistras

-0.48

Correlation Coefficient

Bridger Aerospace  Mistras

Very good diversification

The 3 months correlation between Bridger and Mistras is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bridger Aerospace Group and Mistras Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mistras Group and Bridger Aerospace 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 Bridger Aerospace Group are associated (or correlated) with Mistras. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mistras Group has no effect on the direction of Bridger Aerospace i.e., Bridger Aerospace and Mistras go up and down completely randomly.

Pair Corralation between Bridger Aerospace and Mistras

Given the investment horizon of 90 days Bridger Aerospace Group is expected to generate 2.25 times more return on investment than Mistras. However, Bridger Aerospace is 2.25 times more volatile than Mistras Group. It trades about 0.11 of its potential returns per unit of risk. Mistras Group is currently generating about -0.05 per unit of risk. If you would invest  182.00  in Bridger Aerospace Group on September 5, 2024 and sell it today you would earn a total of  82.00  from holding Bridger Aerospace Group or generate 45.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bridger Aerospace Group  vs.  Mistras Group

Bridger Aerospace

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bridger Aerospace Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Bridger Aerospace reported solid returns over the last few months and may actually be approaching a breakup point.

Mistras Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mistras Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Bridger Aerospace and Mistras

The main advantage of trading using opposite Bridger Aerospace and Mistras positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridger Aerospace position performs unexpectedly, Mistras 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 Mistras will offset losses from the drop in Mistras' long position.

The idea behind Bridger Aerospace Group and Mistras Group 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.