Correlation Between MYR and Salon City

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

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

Diversification Opportunities for MYR and Salon City

0.0

Correlation Coefficient

MYR  Salon City

Pay attention - limited upside

The 3 months correlation between MYR and Salon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and Salon City in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salon City 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 Salon City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salon City has no effect on the direction of MYR i.e., MYR and Salon City go up and down completely randomly.

Pair Corralation between MYR and Salon City

If you would invest  0.01  in Salon City on December 17, 2024 and sell it today you would earn a total of  0.00  from holding Salon City or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

MYR Group  vs.  Salon City

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.

Salon City

Risk-Adjusted Performance

Very Weak

Over the last 90 days Salon City has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Salon City is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with MYR and Salon City

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

The idea behind MYR Group and Salon City 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.

Check out your portfolio center.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.