Correlation Between Mistras and Astec Industries

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

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

Diversification Opportunities for Mistras and Astec Industries

-0.22

Correlation Coefficient

Mistras  Astec Industries

Very good diversification

The 3 months correlation between Mistras and Astec is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and Astec Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astec Industries and Mistras 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 Mistras Group are associated (or correlated) with Astec Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astec Industries has no effect on the direction of Mistras i.e., Mistras and Astec Industries go up and down completely randomly.

Pair Corralation between Mistras and Astec Industries

Allowing for the 90-day total investment horizon Mistras Group is expected to generate 0.55 times more return on investment than Astec Industries. However, Mistras Group is 1.82 times less risky than Astec Industries. It trades about 0.06 of its potential returns per unit of risk. Astec Industries is currently generating about -0.04 per unit of risk. If you would invest  924.00  in Mistras Group on December 1, 2024 and sell it today you would earn a total of  46.00  from holding Mistras Group or generate 4.98% return on investment over 90 days.

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

Mistras Group  vs.  Astec Industries

Mistras Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mistras Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Mistras is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Astec Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Astec Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Mistras and Astec Industries

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

The idea behind Mistras Group and Astec Industries 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..