Correlation Between Mistras and Blue Line
Can any of the company-specific risk be diversified away by investing in both Mistras and Blue Line 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 Blue Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mistras Group and Blue Line Protection, you can compare the effects of market volatilities on Mistras and Blue Line 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 Blue Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and Blue Line.
Diversification Opportunities for Mistras and Blue Line
Poor diversification
The 3 months correlation between Mistras and Blue is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and Blue Line Protection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Line Protection 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 Blue Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Line Protection has no effect on the direction of Mistras i.e., Mistras and Blue Line go up and down completely randomly.
Pair Corralation between Mistras and Blue Line
Allowing for the 90-day total investment horizon Mistras is expected to generate 47.73 times less return on investment than Blue Line. But when comparing it to its historical volatility, Mistras Group is 8.72 times less risky than Blue Line. It trades about 0.01 of its potential returns per unit of risk. Blue Line Protection is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Blue Line Protection on September 24, 2024 and sell it today you would earn a total of 1.51 from holding Blue Line Protection or generate 37.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Mistras Group vs. Blue Line Protection
Performance |
Timeline |
Mistras Group |
Blue Line Protection |
Mistras and Blue Line Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mistras and Blue Line
The main advantage of trading using opposite Mistras and Blue Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras position performs unexpectedly, Blue Line 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 Blue Line will offset losses from the drop in Blue Line's long position.Mistras vs. Genpact Limited | Mistras vs. Broadridge Financial Solutions | Mistras vs. BrightView Holdings | Mistras vs. First Advantage Corp |
Blue Line vs. BIO Key International | Blue Line vs. LogicMark | Blue Line vs. Knightscope | Blue Line vs. Guardforce AI Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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