Correlation Between MYR and Bilfinger

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

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

Diversification Opportunities for MYR and Bilfinger

-0.83

Correlation Coefficient

MYR  Bilfinger

Pay attention - limited upside

The 3 months correlation between MYR and Bilfinger is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and Bilfinger SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilfinger SE ADR 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 Bilfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilfinger SE ADR has no effect on the direction of MYR i.e., MYR and Bilfinger go up and down completely randomly.

Pair Corralation between MYR and Bilfinger

Given the investment horizon of 90 days MYR Group is expected to under-perform the Bilfinger. But the stock apears to be less risky and, when comparing its historical volatility, MYR Group is 1.25 times less risky than Bilfinger. The stock trades about -0.11 of its potential returns per unit of risk. The Bilfinger SE ADR is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  942.00  in Bilfinger SE ADR on December 29, 2024 and sell it today you would earn a total of  579.00  from holding Bilfinger SE ADR or generate 61.46% return on investment over 90 days.

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

MYR Group  vs.  Bilfinger SE ADR

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.

Bilfinger SE ADR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bilfinger SE ADR are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Bilfinger showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MYR and Bilfinger

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

The idea behind MYR Group and Bilfinger SE ADR 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.