Correlation Between Forrester Research and Mistras

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

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

Diversification Opportunities for Forrester Research and Mistras

0.17

Correlation Coefficient

Forrester Research  Mistras

Average diversification

The 3 months correlation between Forrester and Mistras is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Forrester Research and Mistras Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mistras Group and Forrester Research 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 Forrester Research 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 Forrester Research i.e., Forrester Research and Mistras go up and down completely randomly.

Pair Corralation between Forrester Research and Mistras

Given the investment horizon of 90 days Forrester Research is expected to generate 0.61 times more return on investment than Mistras. However, Forrester Research is 1.64 times less risky than Mistras. It trades about -0.04 of its potential returns per unit of risk. Mistras Group is currently generating about -0.05 per unit of risk. If you would invest  1,791  in Forrester Research on September 5, 2024 and sell it today you would lose (121.00) from holding Forrester Research or give up 6.76% of portfolio value over 90 days.

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

Forrester Research  vs.  Mistras Group

Forrester Research

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forrester Research has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Forrester Research is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

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 Forrester Research and Mistras

The main advantage of trading using opposite Forrester Research and Mistras positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forrester Research 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 Forrester Research 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.