Correlation Between MYR and Agrify Corp

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

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

Diversification Opportunities for MYR and Agrify Corp

0.63

Correlation Coefficient

MYR  Agrify Corp

Poor diversification

The 3 months correlation between MYR and Agrify is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and Agrify Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrify Corp 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 Agrify Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrify Corp has no effect on the direction of MYR i.e., MYR and Agrify Corp go up and down completely randomly.

Pair Corralation between MYR and Agrify Corp

Given the investment horizon of 90 days MYR is expected to generate 6.53 times less return on investment than Agrify Corp. But when comparing it to its historical volatility, MYR Group is 5.82 times less risky than Agrify Corp. It trades about 0.3 of its potential returns per unit of risk. Agrify Corp is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  354.00  in Agrify Corp on August 31, 2024 and sell it today you would earn a total of  5,101  from holding Agrify Corp or generate 1440.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

MYR Group  vs.  Agrify Corp

MYR Group

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MYR Group are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, MYR reported solid returns over the last few months and may actually be approaching a breakup point.

Agrify Corp

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Agrify Corp are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Agrify Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MYR and Agrify Corp

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

The idea behind MYR Group and Agrify Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.