Correlation Between Broadridge Financial and Mistras

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

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

Diversification Opportunities for Broadridge Financial and Mistras

-0.62

Correlation Coefficient

Broadridge Financial  Mistras

Excellent diversification

The 3 months correlation between Broadridge and Mistras is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Broadridge Financial Solutions and Mistras Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mistras Group and Broadridge Financial 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 Broadridge Financial Solutions 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 Broadridge Financial i.e., Broadridge Financial and Mistras go up and down completely randomly.

Pair Corralation between Broadridge Financial and Mistras

Allowing for the 90-day total investment horizon Broadridge Financial is expected to generate 1.57 times less return on investment than Mistras. But when comparing it to its historical volatility, Broadridge Financial Solutions is 2.8 times less risky than Mistras. It trades about 0.09 of its potential returns per unit of risk. Mistras Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  778.00  in Mistras Group on September 22, 2024 and sell it today you would earn a total of  110.00  from holding Mistras Group or generate 14.14% return on investment over 90 days.

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

Broadridge Financial Solutions  vs.  Mistras Group

Broadridge Financial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Broadridge Financial Solutions are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Broadridge Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 unsteady performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Broadridge Financial and Mistras

The main advantage of trading using opposite Broadridge Financial and Mistras positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadridge Financial 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 Broadridge Financial Solutions 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.