Correlation Between Primoris Services and Ming Shing
Can any of the company-specific risk be diversified away by investing in both Primoris Services and Ming Shing 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 Primoris Services and Ming Shing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Primoris Services and Ming Shing Group, you can compare the effects of market volatilities on Primoris Services and Ming Shing 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 Primoris Services with a short position of Ming Shing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primoris Services and Ming Shing.
Diversification Opportunities for Primoris Services and Ming Shing
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Primoris and Ming is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Primoris Services and Ming Shing Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Shing Group and Primoris Services 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 Primoris Services are associated (or correlated) with Ming Shing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Shing Group has no effect on the direction of Primoris Services i.e., Primoris Services and Ming Shing go up and down completely randomly.
Pair Corralation between Primoris Services and Ming Shing
Given the investment horizon of 90 days Primoris Services is expected to generate 0.26 times more return on investment than Ming Shing. However, Primoris Services is 3.86 times less risky than Ming Shing. It trades about -0.08 of its potential returns per unit of risk. Ming Shing Group is currently generating about -0.25 per unit of risk. If you would invest 8,398 in Primoris Services on September 24, 2024 and sell it today you would lose (333.00) from holding Primoris Services or give up 3.97% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.24% |
Values | Daily Returns |
Primoris Services vs. Ming Shing Group
Performance |
Timeline |
Primoris Services |
Ming Shing Group |
Primoris Services and Ming Shing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Primoris Services and Ming Shing
The main advantage of trading using opposite Primoris Services and Ming Shing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primoris Services position performs unexpectedly, Ming Shing 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 Ming Shing will offset losses from the drop in Ming Shing's long position.Primoris Services vs. MYR Group | Primoris Services vs. Granite Construction Incorporated | Primoris Services vs. Matrix Service Co | Primoris Services vs. Api Group Corp |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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