Correlation Between SmartStop Self and MYR

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

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

Diversification Opportunities for SmartStop Self and MYR

0.14

Correlation Coefficient

SmartStop Self  MYR

Average diversification

The 3 months correlation between SmartStop and MYR is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SmartStop Self Storage and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR Group and SmartStop Self 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 SmartStop Self Storage are associated (or correlated) with MYR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYR Group has no effect on the direction of SmartStop Self i.e., SmartStop Self and MYR go up and down completely randomly.

Pair Corralation between SmartStop Self and MYR

Assuming the 90 days horizon SmartStop Self Storage is expected to under-perform the MYR. But the pink sheet apears to be less risky and, when comparing its historical volatility, SmartStop Self Storage is 3.42 times less risky than MYR. The pink sheet trades about -0.03 of its potential returns per unit of risk. The MYR Group is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  9,788  in MYR Group on September 18, 2024 and sell it today you would earn a total of  6,880  from holding MYR Group or generate 70.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

SmartStop Self Storage  vs.  MYR Group

SmartStop Self Storage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SmartStop Self Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, SmartStop Self is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

MYR Group

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MYR Group are ranked lower than 24 (%) 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.

Pair Trading with SmartStop Self and MYR

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

The idea behind SmartStop Self Storage and MYR 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.