Correlation Between Myers Industries and Alliance Creative

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

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

Diversification Opportunities for Myers Industries and Alliance Creative

0.1

Correlation Coefficient

Myers Industries  Alliance Creative

Average diversification

The 3 months correlation between Myers and Alliance is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Myers Industries and Alliance Creative Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Creative and Myers Industries 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 Myers Industries are associated (or correlated) with Alliance Creative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Creative has no effect on the direction of Myers Industries i.e., Myers Industries and Alliance Creative go up and down completely randomly.

Pair Corralation between Myers Industries and Alliance Creative

Considering the 90-day investment horizon Myers Industries is expected to generate 0.21 times more return on investment than Alliance Creative. However, Myers Industries is 4.75 times less risky than Alliance Creative. It trades about 0.05 of its potential returns per unit of risk. Alliance Creative Gr is currently generating about -0.07 per unit of risk. If you would invest  1,116  in Myers Industries on September 25, 2024 and sell it today you would earn a total of  24.00  from holding Myers Industries or generate 2.15% return on investment over 90 days.

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

Myers Industries  vs.  Alliance Creative Gr

Myers Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Myers Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Alliance Creative

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alliance Creative Gr are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical and fundamental indicators, Alliance Creative showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Myers Industries and Alliance Creative

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

The idea behind Myers Industries and Alliance Creative Gr 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.