Correlation Between SSC Security and Mistras

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

By analyzing existing cross correlation between SSC Security Services and Mistras Group, you can compare the effects of market volatilities on SSC Security and Mistras 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 SSC Security with a short position of Mistras. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSC Security and Mistras.

Diversification Opportunities for SSC Security and Mistras

-0.33

Correlation Coefficient

SSC Security  Mistras

Very good diversification

The 3 months correlation between SSC and Mistras is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SSC Security Services and Mistras Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mistras Group and SSC Security 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 SSC Security Services are associated (or correlated) with Mistras. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mistras Group has no effect on the direction of SSC Security i.e., SSC Security and Mistras go up and down completely randomly.

Pair Corralation between SSC Security and Mistras

Assuming the 90 days horizon SSC Security is expected to generate 2.92 times less return on investment than Mistras. In addition to that, SSC Security is 1.28 times more volatile than Mistras Group. It trades about 0.01 of its total potential returns per unit of risk. Mistras Group is currently generating about 0.05 per unit of volatility. If you would invest  518.00  in Mistras Group on October 12, 2024 and sell it today you would earn a total of  379.00  from holding Mistras Group or generate 73.17% return on investment over 90 days.

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

SSC Security Services  vs.  Mistras Group

SSC Security Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSC Security Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SSC Security is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Mistras Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mistras Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental 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 SSC Security and Mistras

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

The idea behind SSC Security Services and Mistras Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.