Correlation Between Mistras and Universal Security
Can any of the company-specific risk be diversified away by investing in both Mistras and Universal Security 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 Universal Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mistras Group and Universal Security Instruments, you can compare the effects of market volatilities on Mistras and Universal Security 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 Universal Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and Universal Security.
Diversification Opportunities for Mistras and Universal Security
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mistras and Universal is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and Universal Security Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Security 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 Universal Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Security has no effect on the direction of Mistras i.e., Mistras and Universal Security go up and down completely randomly.
Pair Corralation between Mistras and Universal Security
Allowing for the 90-day total investment horizon Mistras Group is expected to generate 0.54 times more return on investment than Universal Security. However, Mistras Group is 1.85 times less risky than Universal Security. It trades about 0.06 of its potential returns per unit of risk. Universal Security Instruments is currently generating about 0.03 per unit of risk. If you would invest 537.00 in Mistras Group on October 23, 2024 and sell it today you would earn a total of 457.00 from holding Mistras Group or generate 85.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 99.8% |
Values | Daily Returns |
Mistras Group vs. Universal Security Instruments
Performance |
Timeline |
Mistras Group |
Universal Security |
Mistras and Universal Security Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mistras and Universal Security
The main advantage of trading using opposite Mistras and Universal Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras position performs unexpectedly, Universal Security 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 Universal Security will offset losses from the drop in Universal Security's long position.Mistras vs. Team Inc | Mistras vs. Thermon Group Holdings | Mistras vs. MRC Global | Mistras vs. Vishay Precision Group |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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