Correlation Between MYR and Social Detention

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

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

Diversification Opportunities for MYR and Social Detention

-0.7

Correlation Coefficient

MYR  Social Detention

Excellent diversification

The 3 months correlation between MYR and Social is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and Social Detention in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Social Detention 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 Social Detention. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Social Detention has no effect on the direction of MYR i.e., MYR and Social Detention go up and down completely randomly.

Pair Corralation between MYR and Social Detention

Given the investment horizon of 90 days MYR Group is expected to under-perform the Social Detention. But the stock apears to be less risky and, when comparing its historical volatility, MYR Group is 1.35 times less risky than Social Detention. The stock trades about -0.11 of its potential returns per unit of risk. The Social Detention is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.50  in Social Detention on December 27, 2024 and sell it today you would earn a total of  0.02  from holding Social Detention or generate 4.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

MYR Group  vs.  Social Detention

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.

Social Detention

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Social Detention are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Social Detention may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with MYR and Social Detention

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

The idea behind MYR Group and Social Detention 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.