Correlation Between Myers Industries and Imaflex

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

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

Diversification Opportunities for Myers Industries and Imaflex

0.44

Correlation Coefficient

Myers Industries  Imaflex

Very weak diversification

The 3 months correlation between Myers and Imaflex is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Myers Industries and Imaflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imaflex 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 Imaflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imaflex has no effect on the direction of Myers Industries i.e., Myers Industries and Imaflex go up and down completely randomly.

Pair Corralation between Myers Industries and Imaflex

Considering the 90-day investment horizon Myers Industries is expected to under-perform the Imaflex. But the stock apears to be less risky and, when comparing its historical volatility, Myers Industries is 1.28 times less risky than Imaflex. The stock trades about -0.05 of its potential returns per unit of risk. The Imaflex is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  110.00  in Imaflex on October 4, 2024 and sell it today you would lose (10.00) from holding Imaflex or give up 9.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

Myers Industries  vs.  Imaflex

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 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.

Imaflex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imaflex has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic 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 Myers Industries and Imaflex

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

The idea behind Myers Industries and Imaflex 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.