Correlation Between MYR and Mader Group

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

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

Diversification Opportunities for MYR and Mader Group

0.64

Correlation Coefficient

MYR  Mader Group

Poor diversification

The 3 months correlation between MYR and Mader is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and Mader Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mader Group Limited 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 Mader Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mader Group Limited has no effect on the direction of MYR i.e., MYR and Mader Group go up and down completely randomly.

Pair Corralation between MYR and Mader Group

If you would invest  357.00  in Mader Group Limited on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Mader Group Limited or generate 0.0% return on investment over 90 days.

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

MYR Group  vs.  Mader Group Limited

MYR Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MYR Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, MYR reported solid returns over the last few months and may actually be approaching a breakup point.

Mader Group Limited

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mader Group Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Mader Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with MYR and Mader Group

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

The idea behind MYR Group and Mader Group Limited 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.