Correlation Between MYR and Relief Therapeutics

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

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

Diversification Opportunities for MYR and Relief Therapeutics

-0.64

Correlation Coefficient

MYR  Relief Therapeutics

Excellent diversification

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

Pair Corralation between MYR and Relief Therapeutics

Given the investment horizon of 90 days MYR Group is expected to generate 0.56 times more return on investment than Relief Therapeutics. However, MYR Group is 1.78 times less risky than Relief Therapeutics. It trades about 0.17 of its potential returns per unit of risk. Relief Therapeutics Holding is currently generating about -0.14 per unit of risk. If you would invest  11,436  in MYR Group on October 25, 2024 and sell it today you would earn a total of  3,881  from holding MYR Group or generate 33.94% return on investment over 90 days.

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

MYR Group  vs.  Relief Therapeutics Holding

MYR Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MYR Group are ranked lower than 13 (%) 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.

Relief Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with MYR and Relief Therapeutics

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

The idea behind MYR Group and Relief Therapeutics Holding 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.