Correlation Between MYR and AGCO

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

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

Diversification Opportunities for MYR and AGCO

0.05

Correlation Coefficient

MYR  AGCO

Significant diversification

The 3 months correlation between MYR and AGCO is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and AGCO Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGCO and MYR 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 MYR Group are associated (or correlated) with AGCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGCO has no effect on the direction of MYR i.e., MYR and AGCO go up and down completely randomly.

Pair Corralation between MYR and AGCO

Given the investment horizon of 90 days MYR Group is expected to under-perform the AGCO. In addition to that, MYR is 1.3 times more volatile than AGCO Corporation. It trades about -0.1 of its total potential returns per unit of risk. AGCO Corporation is currently generating about 0.04 per unit of volatility. If you would invest  9,334  in AGCO Corporation on December 26, 2024 and sell it today you would earn a total of  394.00  from holding AGCO Corporation or generate 4.22% return on investment over 90 days.

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

MYR Group  vs.  AGCO Corp.

MYR Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days MYR Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AGCO

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AGCO Corporation are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, AGCO may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with MYR and AGCO

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

The idea behind MYR Group and AGCO Corporation 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..